Contemplating entering the industrial real estate market? With over 89 percent of investors using the services of an industrial real estate agent or an industrial real estate broker when acquiring or selling a property, finding the right industrial real estate broker is important to the success of the transaction. Hiring a registered and qualified industrial real estate broker is the best protection against losing money through real estate investing blunders or missed chances.
That is why it is critical to discover and hire a good industrial real estate broker. This pivotal phase has the potential to make or ruin enterprises. And, as critical as these challenges are, their job entails much more than locating a suitable property and negotiating the deal’s conditions.
An overview of Vietnam’s industrial real estate market
In 2021 and continuing into 2022, the industrial real estate market is projected to increase, as Vietnam accelerates its industrialization and modernization, creating a significant demand for industrial real estate broker. Many big multinational businesses have abandoned the Chinese market in favor of setting up facilities in Vietnam to boost production and investment.
Foreign firms have increased their investments in Vietnam
Vietnam has achieved significant progress, and the country’s economy is likely to surpass that of several Southeast Asian countries in the next few years. When it comes to investing in Vietnam, the country has seen a steady infusion of foreign capital since the early 1990s, with an annual GDP growth rate that exceeds 7%.
Aside from the country’s stunning scenery and spectacular beaches, what piques the attention of international investors is the abundance of business prospects, plentiful resources, low-cost labor, strategic position in China, and favorable business climate.
Why migrate businesses to Vietnam?
- Increasing Population
Vietnam is the third most populous country in Southeast Asia, with approximately 95 million people living in a variety of towns, cities, and neighborhoods. These locations range in size, geography, and demand, and they meet the needs of a wide range of investors.
By 2030, the population will have risen to 105 million. When a country’s population grows, the demand for producing goods rises. As the cost of labor in China has risen dramatically, Vietnam’s large population offers a cheaper option and an increasingly skilled workforce.
- A Thriving Economy
Vietnam has one of the fastest-growing economies in the world, with an average growth rate of 6.46 percent. This also places Vietnam as the third-largest economy in Southeast Asia. As a result, industrial sectors are continuing to emerge, implying more business potential.
- Government Policies That Are Beneficial to Investors
Vietnam’s closeness to major Asian cities and nations, particularly China, makes it an attractive investment destination for foreigners. Vietnam is strategically located near vital maritime routes for exports and imports due to its extensive coastline. The Vietnamese government provides international corporations with incentives to invest in Vietnam to promote investment in the nation.
Multinational corporations are excluded from import duties, corporate tax, and land use tax if they invest in healthcare or high-tech areas. With the execution of the Vietnamese government’s various programs, a total of $24.4 billion in foreign investment was registered.
- Free Trade Agreements (FTAs)
With recent trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), EU-Vietnam FTA (EVFTA), UK-Vietnam FTA (UKVFTA), and the upcoming Regional Comprehensive Economic Partnership (RCEP), Vietnam appears to prioritize international trade integration with trade partners other than ASEAN. The country is a vital ASEAN member, and one of ASEAN’s goals is to reduce intra-regional tariffs.
Such trade agreements would enable Vietnam to take advantage of lower tariffs, both inside the ASEAN Economic Community (AEC) and with the EU and the US, in order to lure exporting enterprises to manufacture in Vietnam and sell to partners outside the ASEAN.
Vietnam’s market is being expanded further as a result of its improving links with Europe and China: Vietnam recently inked the EU-Vietnam Free Trade Agreement with Europe.
- Infrastructure Development
With the expansion of the economy, Vietnam is seeing rapid infrastructure development. The Vietnamese government has committed a large amount of money to spending on the country’s infrastructure: motorways, hospitals, international airports and new ports.
Because of improved infrastructure, transportation and shipping inside Vietnam is more convenient and efficient. As a result of the Vietnamese government’s collaboration with multinational corporations in creating new infrastructure in Vietnam, there are numerous investment prospects for international enterprises.
Tips for enterprises to choose an industrial real estate broker in Vietnam
Industrial property agents are the way to assure a smooth and rapid transaction. Working with a recognized industrial real estate agency gives various benefits, including assistance with pricing, legislation and regulations, professional networks, support and finance, skilled negotiating, spotting potential difficulties, and so on.
- Make a list of your guidelines
Determine the sort of property for which you are looking before contacting a broker. Are you looking for the ideal industrial space, for example? What is your budget for a lease or purchase? Where do you want your company to be located? How much room will you require? Is it necessary to be visible or discrete? Is it vital to have a good image of the building or is it not necessary? Preparing a list of criteria ahead of time will assist your broker in providing results as promptly as possible.
- Looking for an industrial real estate unit with multi-disciplinary knowledge?
You should look for an industrial broker that specializes in the sort of property you are looking for. You’ll want a broker who is informed about the locations in which you’re interested. You can enquire about previous transactions involving the kind of property you’re interested in and in the places you’re interested in.
- How much industrial real estate experience does your broker have?
It takes years to develop the kind of in-depth industry knowledge that a skilled industrial real estate broker would have. It also takes time to learn how to assess factors like return on investment, cap rates and ROI.
The primary driver is the rising demand for real estate from domestic buyers who are urbanizing and generating higher discretionary budgets. Nonetheless, Vietnam continues to be the preferred destination for foreign investment in Southeast Asia. As part of the planning phase, it is critical to choose a trustworthy industrial real estate broker.
With outstanding industry knowledge and experience, Savills Industrial Services Department and its manager, Mr. John Campbell, are the first port of contact for businesses considering market entry, diversification, or extension of operations.