2Q19: High occupancy
rate in Southern Vietnam’s industrial sector

Across the top five leading industrial markets in SKEZ, the average occupancy rate achieved a healthy rate at 81% in 2Q19, driven by HCMC, Binh Duong and Dong Nai provinces.

July 10, 2019

VIETNAM, 5 July 2019 – Being the first established industrial areas in Vietnam, Binh Duong and Dong Nai are still the most desired destinations for new manufacturer set-up, thanks to their sound foundation for manufacturing development, including synchronised infrastructure system and well-established administrative procedures supporting enterprises’ operation.

As of 2Q19, the South registered a total leasable land area of 25,060 ha, 2.5 times higher than the Northern level. As the existing land bank is highly occupied, a notable supply, coming from either subsequent phases of existing IPs and/or new ones, are set to come to the market to capitalise on the increasing demand.

Strong demand supported by the escalating trade war drove the average land price in 2Q19 to a new level of USD 95 per sqm per lease term, an increase of 15.8% y-o-y. This notable growth is contributed mostly by Long An, which recorded the highest growth as another favourable destination besides Binh Duong and Dong Nai. HCMC, one of the two biggest economies nationwide, still topped the market with an average price at USD 162 per sqm per lease term.

RBF rent ranged from USD 3.5 to USD 5.0 per sqm per month for a minimum lease term of 3-5 years. This rent level increased slightly compared to the previous update time, a result of healthy demand. An additional 18,290 ha of land is oriented for industrial development in the Southern area, mostly in Long An, Binh Duong and Dong Nai provinces.

As US-China trade tensions will likely escalate, the trend of manufacturing shifting away from China to the South East Asia region will continue to benefit the whole region, including Vietnam. Further, Vietnam’s continuous expansion of trade networks, with the European Union – Vietnam Free Trade Agreement (EVFTA) newly signed at end-June 2019 being the latest, also expectedly bolsters the attractiveness of Vietnam's industrial market, generating further demand for industrial property in the country.

Download Vietnam Property Market Brief 2Q19 Here

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