Racing to sell small factories

According to the announcement of the Ministry of Planning and Investment, in the first 9 months of 2023, the whole country had 75,800 enterprises temporarily suspending business, an increase of 21.2% over the same period in 2022; 46,100 enterprises stopped operating pending dissolution procedures, an increase of 26.9%; 13,200 enterprises completed dissolution procedures, a decrease of 4.3%. On average, 15,000 enterprises withdrew from the market per month, most of them small and medium enterprises.

Reduced by tens of billions of dong but still difficult to sell

This explains why, while many foreign enterprises and corporations are hunting for large land funds to develop industrial parks or looking for large land areas in industrial parks to expand production, many small enterprises and business households are continuously selling their business premises, factories, and warehouses because they have stopped production or cannot find tenants. In particular, according to experts, due to inevitable demand and competition in the supply chain, the increasing number of large factory complexes has caused small warehouses to gradually run out of space.

Taking a tour around the suburban areas of Ho Chi Minh City, we noted that many medium and small-sized factories are being offered for sale at prices 20% - 40% lower than 2 years ago. For example, Mr. H. is selling a factory of nearly 2,000 ^m2 including: 450 ^m2 of residential land and more than 1,500 ^m2 of area in Duc Hoa district, Long An province for 16 billion VND, while previously many people asked to buy for 20-22 billion VND, he did not sell because at that time business was still good. Up to now, due to business difficulties, loans are due, so he decided to close the factory and put it up for sale to get money to pay off the bank because he could not afford the interest of 120 million VND/month.

Another facility also in Duc Hoa district with an area of ​​5,400 ^m2 (including 4,000 ^m2 of factory, the rest is agricultural land) is being offered for sale at 23 billion VND, 12 billion VND lower than 2 years ago but still negotiable. According to the broker, this factory is located near the industrial park, has business licenses for the following industries: textile dyeing, seafood processing, fertilizer...; full fire prevention and fighting (PCCC) license, so it is very convenient to use as a satellite warehouse.

In the same difficult situation, the leader of a plastic manufacturing company in Duc Hoa district said that he would sell the entire factory and the business license for recycled plastics with an area of ​​7,400 ^m2 , for about 18-19 billion VND. This recycling factory has a capacity of 100,000 tons/year, and already has an environmental license. The buyer can start production without having to re-apply for a license, because environmental licenses in the plastics industry are not easy to obtain, the process is very long and expensive.

"In this industry, environmental criteria are very strict, making mistakes can easily lead to inspections and checks... While the product output is increasingly difficult to sell, we decided to shut down and sell the factory at a loss to recover capital" - this person said.

According to a reporter from Nguoi Lao Dong Newspaper, warehouses and factories in the suburbs of Ho Chi Minh City are being advertised for sale at cheap prices, but it is not easy to find buyers in the difficult economic context.

A factory in Long An province is for sale.

Cheap because of lack of legality?

Commenting on this situation, Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Company, said that the sharp decline in export activities since the beginning of the year has greatly affected small and medium enterprises. Because these enterprises mostly process for large enterprises and cannot control both input and output, they are the most vulnerable when the market is difficult.

"With no more orders, owners of processing facilities have to cut labor, close down, and transfer factories. That's why we've seen a lot of small factories for sale recently. However, most of these factories are built illegally, on agricultural land, and are not the right size... so selling them is even more difficult, and prices have dropped significantly compared to normal real estate," Mr. Quang analyzed.

Sharing the same view, Mr. Nguyen Hong Hai, General Director of VNO Company, said that after the COVID-19 pandemic, especially after incidents related to fire and explosion, labor safety, factory buildings and production facilities, in addition to legal factors, must also comply with many standards on land (far from residential areas, suitable for planning as production - business land...), fire prevention, environment... Factories that were built spontaneously before were inspected very carefully so they could not continue, forcing the old owners to close or sell.

According to Mr. Hai, the price of small-scale factory real estate has dropped to the lowest level ever. This is an opportunity for those who want to do business and have the capacity to build small factories and satellites during this period. However, it is necessary to consider the risks related to law, environment, fire prevention and fighting... as mentioned.

Mainly rent large factory area

Mr. John Campbell - Deputy Director, Head of Industrial Services Department of Savills Vietnam - commented that recent large-scale factory leasing deals in Vietnam show that there has been a change in the market when businesses and investors mainly look for large-scale pre-built factories instead of renting or buying small facilities as before.

Source: https://nld.com.vn/kinh-te/dua-nhau-rao-ban-nha-xuong-co-nho-20231113211915977.htm