Northern Industrial Land and Ready-built Factory 2Q21

Land prices and rents levelled off

The fact that industrial parks in Bac Ninh and Bac Giang had to suspend production due to the impact of the epidemic has restrained the growth rate of industrial land prices. Land price remained unchanged at USD 107/m2/lease term in 2Q21, while it was still recording an increase of 5.9% y-o-y, slowing the growth momentum compared to 1Q21. Similarly, RBF also recorded a lower growth rate compared to 1Q21, staying at 4.7% y-o-y.

Outlook: Many developers are eyeing opportunities in the Northeast region 

Although it has not been officially confirmed, the fact that Pegatron is expected to increase investment capital in Vietnam after its first project in Hai Phong, reflecting the upbeat demand for industrial real estate in the future. In addition to the provinces in the Red River Delta, Northeast provinces such as Bac Giang, Quang Ninh, and Thai Nguyen are attracting increasing attention from investors, thanks to the competitive rental prices and the improving infrastructure. Land prices in these areas are projected to continue growing at 8-10% y-o-y. Similarly, the RBF market outlook is also vibrant in the Northeast region, with many new investors entering the market, such as GNP Industrial or Vietnam Industrial Park JSC.

Note:

1. Northern area consists of Hanoi, Hai Phong, Bac Ninh, Hung Yen and Hai Duong markets.
2. Land prices exclude Infrastructure maintenance fees, service fees and VAT. Lease term means the remaining land lease term of the project life time.
3. Rents exclude VAT and service charges.
4. Hoa Lac High-tech Park is not included in the surveyed basket owing to their special characteristics.

Source: JLL Research