Northern[1] Industrial Land and Ready-built Factory (RBF) 4Q21

Rising demand, 80% of occupancy rate in the North

January 05, 2022
Quick recovery after the fourth pandemic wave

In 4Q21, no supply was recorded in the Northern industrial land market. However, the market was still vibrant with Gia Binh IP (Bac Ninh province) of HANAKA developer and predicted to start construction at the end of 2021. Yen Phong II-A IP of Pacific developer also got planning approvals from Bac Ninh People’s Committee. Hung Yen People’s Committee has recently made decisions to establish the Vietnam-Korea economic cooperation IP belonging to Ly Thuong Kiet IP and the urban service area. The Lach Huyen Non-Tariff-Logistics and Industrial zone of Hai Phong province will be implemented in early 2022 and expected to boost the total Northern leasable area at over 10,200 ha.

Rising demand, 80% of occupancy rate in the North

On the back of quick recovery from the fourth wave of the pandemic, Ips in the North were attractive destinations for investors. The most notable activity was the decision of Samsung to increase the capacity of its electronics plant in Bac Ninh province by 50%. Hanoi also welcomed a high-tech auxiliary factory of TOMECO in the South Hanoi Supporting Industrial Park (HANSSIP. With many economic recovery plans of the government, the Northern occupancy rate remained stable at 80%, more rapidly rising compared to the occupancy rate at 72% in 3Q21. The occupancy rate of RBFs also had strong growth, reaching 95.6% after domestic companies were back to work as per the economic recovery momentum. Only in November 2021 after the lockdown was lifted, the number of businesses returning to operation was up to 50% compared to the pandemic outbreak in September.

Land prices and rents remain stable

Quick adaptabilities and maintained-ensured business operations in 4Q21 led to the recovery of growth momentum towards industrial land prices. The land price reached USD 110/sqm/lease term[2], up by 7.1% y-o-y. In tandem with the land price, the rent of RBF in 4Q21 also recorded better growth momentum than in 3Q21, up by 4.9% y-o-y.

Outlook: RBFs continue getting investors’ attention

In 2022, market expects to welcome many RBFs, such as 8.1-ha RBF Phase 1 of KTG-BKIM partnership in Yen Phong II-C IP, 10.4-ha RBF Phase 3 of BWID in Hai Duong VISIP IP. Due to large demand from both domestic and international companies, developers have taken into account industrial land banks for building high-quality RBFs not only in the key economic zones of the North but also in neighbouring provinces such as Bac Giang, Thai Nguyen, Vinh Phuc provinces.

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

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