Northern Industrial Land and Ready-built Factory 3Q21
Industrial land prices remained in an upward trend
Market is vibrant with new supply in both industrial land and RBF
In Q321, Hung Yen continued to welcome new supply from Pho Noi A industrial park - expanded phase, with a total area of 93ha, offered by Hoa Phat. In Bac Ninh, 70% of the total area in Yen Phong 2C IP has completed the site clearance process, pushing up the total area of industrial land in the North to about 9,900 hectares.
The RBF market recorded a new supply in Nam Dinh Vu Industrial Park, Hai Phong, and thus, the total supply reached 2.1 million m2 by 3Q21. In the past quarter, 7-floor RBF with a total area of 15,000 m2 has been constructed in the high-tech area in VSIP Bac Ninh Industrial Park, mirroring an emerging trend for multi-floor RBF development in the Northern area.
Hai Phong and Bac Ninh helped to stabilise occupancy rate in Northern region
Despite the adverse impacts of the pandemic, the northern industrial real estate market in 3Q21 is vibrant. Particularly in Hai Phong, where LG has announced to invest an additional USD 1.4 billion to expand production in Trang Due IP. Market in Southern Hanoi like Thai Binh or the Northwest of Hanoi like Vinh Phuc or Phu Tho also recorded new transactions. The occupancy rate of the northern IPs reached 72%, lower than 2Q21 owing to the new supply. The RBF market is also stable, with an occupancy rate of 89%.
Land prices and rents remain stable
With the resumption of operations in the "new normal" of IP in Bac Ninh from July and stable FDI into Hai Phong and Bac Ninh, industrial land prices remained in an upward trend of 6.1% y-o-y, standing at USD 108 per sqm per lease term in 3Q2021. RBF market also had a stable performance, with the average rental price of USD 4.6 per sqm per month, recording a growth of 4.7% y-o-y, lower than the rate seen in 2Q21.
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Outlook: Industrial integrated projects are catching investors’ attention
Investors are eyeing opportunities to develop integrated projects of industrial, residential and commercial in the Northern area. Recently, the Korean LH Group has shown interest in investing in Dai Hung industrial, residential and commercial project, with a total area of 304ha and a total investment of nearly USD500 million in Hai Duong. IDICO – a well-known local player- is also planning to invest in the Vinh Quang Integrated project, with an area of 495ha in Hai Phong. In addition to the traditional industrial clusters, IP developers are also expanding their portfolios to other suburbs. Notably, Viglacera has recently proposed to Yen Bai Province to conduct a feasibility study for an Industrial park - Commercial – Residential development with a total area of about 496ha.
- Northern area consists of Hanoi, Hai Phong, Bac Ninh, Hung Yen and Hai Duong markets.
- Land prices exclude Infrastructure maintenance fees, service fees and VAT. Lease term means the remaining land lease term of the project life time.
- Rents exclude VAT and service charges.
- Hoa Lac High-tech Park is not included in the surveyed basket owing to their special characteristics.
Source: JLL Research