Need to 'green' industrial zones to increase attractiveness to FDI capital flows

In the context of the global investment market facing many difficulties with the decline of investment capital flows into major markets, high borrowing costs, wider bid-ask spreads and ongoing global concerns, investment sentiment in the Asia-Pacific region has become more cautious. However, Vietnam has become one of the bright spots when attracting a large amount of FDI capital into many fields such as real estate, processing industry, data centers, etc.

This bright spot is clearly shown in the data of the Foreign Investment Agency - Ministry of Planning and Investment, when in the first 7 months of 2024, the total registered FDI capital in Vietnam reached more than 18 billion USD, an increase of 10.9% over the same period in 2023. Foreign investors have poured capital into 48 provinces and cities nationwide, focusing on provinces and cities with good infrastructure, stable human resources, and dynamism in investment promotion.

Notable among them are industrial centers such as Bac Ninh, Bac Giang, Quang Ninh, Binh Duong, Ba Ria - Vung Tau, Hanoi, Hai Phong,... The top 10 localities alone have attracted 79.5% of new projects and 78.6% of the country's FDI capital.

The development of industrial real estate has helped the Vietnamese market have many advantages in attracting investment.

In addition, by the end of July, the country had 1,816 new projects granted foreign investment registration certificates with a capital of more than 10.7 billion USD. An increase of 12% in the number of projects and 36% in registered capital compared to the same period in 2023. Realized FDI capital also reached 12.6 billion USD, an increase of 8.4% over the same period last year, this is the highest implementation level of 7 months in the period 2020-2024.

The above figures show that foreign investors continue to believe in the development of the domestic economy. At the same time, competitive factors in leasing premises and labor costs are still advantages of the Vietnamese market.

However, many opinions say that the appearance of foreign investors and the development of countries in the region in the industrial real estate sector have made the advantages of the Vietnamese market face many challenges. Especially when foreign investors are having many advantages in experience in "greening" industrial parks, the trend of the market in the coming time.

According to Mr. Thomas Rooney, Senior Manager of Industrial Real Estate at Savills Hanoi, based on data from the primary market, many domestic and international investors are considering converting their industrial parks into environmentally friendly industrial parks. Foreign investors are more focused on the environment than ever before, with environmental protection and social responsibility being part of their global goals.

Domestic enterprises are also increasingly focusing on developing industrial parks in the direction of achieving environmental, social and governance (ESG) factors, in the context that Vietnam is aiming for Net Zero by 2050 and has many ESG development programs and policies in Vietnam. In April 2024, the Ministry of Planning and Investment proposed the Law on Industrial Parks and Economic Zones to create conditions for Vietnam to build large industrial parks to meet the requirements of supply chain development as well as green economic development.

Mr. Thomas Rooney, Senior Manager of Industrial Real Estate, Savills Hanoi

"Other countries such as Thailand, Malaysia, Indonesia and the Philippines already have eco-industrial centers. We need more such projects in Vietnam to continue attracting investment," said Mr. Thomas Rooney.

However, Savills experts said that many existing industrial parks have long been developed according to the traditional model. Converting a conventional industrial park into an environmentally friendly industrial park is not simple because of the high cost and the need for the Government to carefully consider the legal framework.

Source: https://www.congluan.vn/can-xanh-hoa-khu-cong-nghiep-de-gia-tang-suc-sut-voi-dong-von-fdi-post309318.html