Occupancy rate at southern industrial parks is on the up

According to JLL, demand for rent has increased thanks to the significant growth of manufacturing industries, leading to high occupancy rate at southern industrial parks in the 2nd quarter of 2019.

The occupancy rate of top 5 industrial markets of the Southern focal economic zone, including Ho Chi Minh City, Binh Duong, Dong Nai, Ba Ria – Vung Tau and Long An province reaches 81% in quarter 2/2019, mainly in HCMC, Binh Duong and Dong Nai province.

As ones of the 1st industrial development areas in Vietnam, Binh Duong and Dong Nai province are still the most sought-after destinations of new manufactures. It’s because of solid foundation for production development, including synchronous infrastructure system and well-developed administrative procedures to support business operation.

An optimistic thing, according to JLL, is that the supply is well enough to meet the continuously increasing need. Evidently, in the 2nd quarter of 2019, total rental industrial land in the South reached 25,060 hectares, 2.5 times higher than the North. Due to high occupancy rate at current land fund, the supply from next phases of existing or new industrial zones has been set up to response the increasing demand.

Certainly, the rental price has also increased rapidly. High rental demand due to the escalating US-China trade war has pushed the average price in the 2nd quarter of 2019 to 95 USD/m2/cycle, 15.8% higher compared with the same period last year.

Long An is currently considered a new attractive destination besides Binh Duong and Dong Nai province. The pronvice has highest growth rate in the quarter. Ho Chi Minh City remains leading with 162 USD/m2/cycle. Rental price of RBF (ready-built factories) ranges from 3.5 – 5 USD/m2/month with a minimum lease term of 3 – 5 years. The price has slightly increased compared with the last 2 quarters, thanks to strong demand for this type.

Regarding industrial market prospect, there are about 18,290 ha of land oriented for industrial development the southern region, mainly centralizing in Long An, Binh Duong and Dong Nai province. Trade tensions between the US and China have escalated further, therefore, the trend of shifting production from China to South East Asia will bring benefits to the whole region, including Vietnam.

Additionally, Vietnam’s efforts to expand the free trade area, in which the latest The European Union –Vietnam Free Trade Agreement (EVFTA) has just been signed at the end of June 2019, is also expected to enhance potential of Vietnam’s industrial market, thus boosting demand for domestic industrial property.

Mr. John Campbell, Chief of Industrial Service – Savills Vietnam, confirmed the requested number of EU clients has increased while waiting for the agreement to be signed. Thanks to EVFTA, Vietnam’s industrial market increasingly attracts the attention.

“By facilitating to apply latest manufacturing technologies as well as strengthening human resource training, Vietnamese government is gradually erasing fears of businesses about feasibility, lack of resources and cost increase. Improving the transparency of the business environment will help reduce investors' concerns and raise production quality standards in the country”, said Mr. Campbell.

Source: Báo Đấu Thầu