Many "bright spots" of the Southern real estate market
For many years, the real estate sector in the Southern region has always been an ideal destination for a series of domestic and foreign investors, attracting significant capital.
In addition to residential real estate, resort real estate, office for rent, etc., industrial real estate is also one of the segments with great growth.
The industrial real estate market continues to be a bright spot in the Vietnamese real estate market in the first half of 2023 with a positive absorption rate recorded in both industrial land, ready-built factories and warehouses (RBF and RBW) in both the North and the South.
According to a report by CBRE (a US commercial real estate investment and services company), for the industrial land market, the absorption area in the first 6 months of 2023 of the Northern and Southern tier 1 markets reached 386ha and 397ha, respectively. Due to the limited industrial land fund available for handover in both regions, while the demand is abundant, industrial land rental prices continue to maintain strong growth.
Industrial zones are developing strongly in the South. Photo: PS
According to records, in the southern provinces, many provinces and cities are concentrating land funds and preparing a series of legal procedures to soon put many industrial parks into operation after attracting investment.
As one of the leading cities in attracting investment. As of June 20, the total FDI capital poured into Ho Chi Minh City reached nearly 2.9 billion USD, an increase of 30.7% over the same period. With this result, Ho Chi Minh City continues to maintain its position in the top 10 localities that foreign-invested enterprises assess as having good prospects in terms of investment environment.
In Binh Duong province, the Binh Duong Statistics Office announced that in the first 6 months of 2023, Binh Duong attracted 943.3 million USD in foreign direct investment (FDI). Of which, 37 projects were granted new investment certificates, an increase of 23.3% over the same period, with a total registered capital of 343.4 million USD.
Along with newly licensed projects, there were 19 projects with adjusted capital, up 58.3% over the same period, with a total adjusted capital of 55 million USD, 3 times higher than the same period. The number of projects contributing capital and buying shares was 67 projects, down 18.3% over the same period, with a total capital of 544.9 million USD, down 24.8% over the same period.
Notably, in 2023, the LEGO Group is building a factory worth over 1.3 billion USD in VSIP III Industrial Park, the project with the largest investment capital in Binh Duong province. According to the plan, LEGO will recruit office staff and prepare for the factory operation process in the third and fourth quarters of 2023 and worker recruitment will begin in 2024.
Well-planned infrastructure and large land funds are prepared to attract investment. Photo: PS
Another locality attracting strong investment is Long An province. Since the beginning of the year, Long An has granted investment certificates to 39 projects with registered capital of 408.5 million USD and adjusted capital for 35 projects, with an increase of 64.29 million USD.
Speaking to Nguoi Dua Tin reporter, Ms. Pham Ngoc Thien Thanh, Head of Research & Consulting Department of CBRE Vietnam said: “The demand for industrial real estate in the South is very diverse. Tenants in the automobile, garment and packaging industries are among the groups actively looking for industrial land, warehouses and ready-built factories in the South. This will attract a lot of capital to develop many different fields.”
Developing infrastructure, green industry, ecology as a premise
Currently, the provinces with strong industrial development in the South such as Ho Chi Minh City, Binh Duong, Dong Nai, Long An... not only focus on attracting FDI capital, but also build strategies to develop large land funds and build technical infrastructure in an ecological direction.
A representative of VSIP Group (a joint venture between Becamex IDC Corporation (Vietnam) and Sembcorp Development Singapore) said that since the construction of the first industrial park in Binh Duong province, this unit has aimed for a green, environmentally friendly industrial park, creating favorable conditions for investors as well as the best jobs for workers.
VSIP Group is currently developing 17 industrial, urban and service zones across Vietnam. Currently, VSIP Group's total land fund has increased to over 11,000 hectares, VSIP is providing production infrastructure for 880 customers from 30 countries and territories, with a total investment of 18.7 billion USD and creating jobs for nearly 300,000 direct workers and millions of indirect workers.
Binh Duong is a province that focuses on investing in developing green industrial parks. Photo: QT
In Binh Duong province, a series of industrial park projects are being focused on by the province for investment and expansion. Such as Song Than Industrial Park 1, 2, 3, Kim Huy Industrial Park, Dai Dang Industrial Park... In which, the development of ecological industrial parks (EIP) is focused on by Binh Duong province.
In mid-June 2023, the People's Committee of Binh Duong province held a workshop to announce the results of the pre-feasibility study on the development potential of the Eco-Industrial Park (EIP) in Binh Duong. Accordingly, the development of the EIP in Binh Duong is expected to bring many significant benefits, including knowledge enrichment, attracting foreign direct investment (FDI) and cost savings.
By establishing an internationally recognized EIP, Binh Duong province becomes an attractive destination for leading investors and FDI. In addition, the implementation of EIP helps reduce production costs, improve decarbonization ratings, and enhance the competitiveness of both investors and industrial parks.
Mr. Pham Ngoc Thuan, General Director of Becamex IDC. Photo: PS
According to Mr. Pham Ngoc Thuan, General Director of Becamex IDC in Binh Duong, Becamex IDC has implemented many breakthrough strategies, typically: from piloting the first one-stop administrative service in Vietnam at Vietnam Singapore Industrial Park (VSIP), to developing the first BOT traffic system on National Highway 13, as well as creating a model for developing an integrated urban industrial park with exemplary services.
Mr. Thuan also said that upgrading existing industrial parks to become smarter, with the ability to provide 4.0 technology platforms such as Artificial Intelligence, Big Data... helps businesses easily convert to smart factory models, smart production to increase labor productivity.
In addition, Becamex has put into operation a Smart Operation Center to help coordinate and monitor operations better; at the same time, adding natural landscapes, trees, applying ISO standards, regulations, and operational KPIs to help the Industrial Park become greener - cleaner - more beautiful.
In addition, for new industrial parks, the task of planning and calculating smart management solutions and criteria for ecological industrial parks will also be specifically considered from the beginning. This contributes to attracting high value-added, green and environmentally friendly industries, creating a premise for future science and technology industrial parks.
Mr. Mai Hung Dung, Permanent Vice Chairman of Binh Duong Provincial People's Committee informed that Binh Duong is oriented to convert traditional industrial parks into smart - ecological industrial park models. At the same time, focusing on attracting investment in high-tech industries, supporting industries, environmentally friendly, improving labor quality, creating high added value.
In addition, the province will conduct research to shift production towards automation, smart production processes and the use of clean energy, renewable energy, large export value, and linking production with the development of industrial services.
“Binh Duong always focuses on promoting innovation and digital transformation in the industrial sector, in order to increase production efficiency, save resources, ensure sustainable environmental factors and contribute to promoting the development of industrial parks, meeting ecological standards,” said Mr. Mai Hung Dung.
Future trends
According to some FDI enterprises, Binh Duong province is taking the lead in developing EIP and the southern provinces of Vietnam are focusing on ecological and environmental protection industrial parks, which increasingly meet the needs and trends of the market. This will inevitably attract foreign enterprises to invest in an attractive and exemplary environment in the future.
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