Despite the pandemic, foreign investors are still confident in Vietnam’s economy and investment climate in the new normal, said the Director of the Foreign Investment Agency (FIA), Do Nhat Hoang.
Vietnamese economic policies and a successful vaccination campaign have created a strong base for foreign businesses to put their trust in Vietnam’s market recovery.
The FIA forecasts that the border reopening on March 15, 2022, the new visa exemption policies, and the shift of European investors’ capital flows due to the Russia-Ukraine conflict will support Vietnam in attracting foreign investment.
Vietnam’s economy is forecast to grow beyond expectations in 2022 as domestic demand rebounds and foreign direct investment (FDI) inflows remain stable. GDP grew by 5.0% year-on-year (YoY) in Q1/2022, according to the General Statistics Office (GSO). Although higher than the Q1-2021 growth of 4.7% and the Q1-2020 growth of 3.7%, it is still lower than the 6.9% recorded in 2019.
Successful Industrial Transactions in Q1/2022
Framas Factory Leases
Savills brokered a 20,000 m2 factory lease between Framas and KTG Industrial in February. The leading German injection molding player took on a 20,000 m2 ready-built property at KTG Industrial Nhon Trach 2 in Dong Nai Province.
Signed at the end of Vietnam’s most serious pandemic outbreak, this ten-year lease represents the continued strength of the Vietnamese economy and the industrial real estate sector.
“This deal indicates an interesting shift in the market, where occupiers are leasing large ready-built facilities. Previously, requirements of this size would have warranted a long-term land lease and construction by the tenant, but we’re seeing companies select quick, flexible, and less capital-intensive routes of renting ready-built assets. ”
John Campbell, Associate Director, Head of Industrial Services at Savills Vietnam
Fuchs’ Long-Term Land Lease
Savills Viet Nam brokered a land lease between Fuchs and Phu My 3 Specialized Industrial Park.
In March 2022, Savills supported Fuchs, a leading German lubricants player, in expanding its Vietnamese operation with a 20,000 m2 long-term land lease at Phu My 3 Specialized Industrial Park in Ba Ria – Vung Tau Province.
“This 55-year lease emphasizes the growth of Ba Ria – Vung Tau’s industrial sector and the need for multinational tenants to consider alternative locations. Not only does the area offer competitive rents and infrastructure suited for medium to heavy industry, but it also provides access to a growing seaport cluster.”
John Campbell, Associate Director, Head of Industrial, Services at Savills Viet Nam
New Projects & Q1/2022 Vietnam Industrial Market Updates
CapitaLand Development Signed a MOU for a US$1 Billion Investment in Bac Giang
The MOU outlines the plan for CapitaLand Development’s first industrial and logistics park and township development in Viet Nam.
BW Industrial Development JSC Acquired Land Developed by DEEP C Industrial Zones
In January, BW Industrial Development JSC announced its latest acquisition of approximately 74,000 m2 of land in the Bac Tien Phong Industrial Zone (Quang Ninh), developed by DEEP C Industrial Zones. It is BW’s first property in Quang Ninh and its third collaboration with DEEP C Industrial Zones. BW is diversifying and expanding its presence across Northern Vietnam.
LOGOS Viet Nam Logistics Venture Announced Its Fourth Acquisition in Vietnam
In February, LOGOS and Manulife Investment Management announced a joint-venture partnership to acquire an 11-ha, build-to-suit (BTS), modern logistics warehouse that provides over 116,000 m2. The property is valued at over US $80 million and is fully committed to a global occupier with an initial five-year lease term.
KCN Vietnam Broke Ground at Phu An Thanh Industrial Park, a Premium Industrial Facility in Long An Province
The 13.4-ha project will have two phases that will provide a total leasable area of 90,516 m2. More than 45,000 m2 will be handed over in early Q4/2022. It is approximately 1 hour from the HCMC CBD and, therefore, has excellent access to Tan Son Nhat International Airport, Cat Lai Port, and Long An Port. In line with KCN Vietnam’s environmental commitment, solar panels will be installed. The company has also invested in designing an innovative hybrid product, providing flexibility and multi-functional facilities.
GNP will Accommodate a Diversified Supply Chain and The Demands of Global Manufacturers
Gaw NP Industrial (GNP) broke ground in December 2021 on its second ready-built factory (RBF) project, the GNP Yen Binh 2 Industrial Center. The 16-ha project will cater to the changing demands of global manufacturers and producers and will ensure smooth and optimized operations. This second facility follows the successful 13-ha GNP Yen Binh 1, which was fully occupied before its completion last June.
TNI Holdings Announced The Launch of a New Industrial Park in Q3/2022
The Gia Loc Industrial Park, developed by TNI and located next to the Ha Noi–Hai Phong Expressway in Hai Duong Province, is rising as one of the most sought-after industrial parks in Northern Vietnam.
The IP comprises 198 hectares of land. It is boosted by its strategic location, which enables convenient connections to Noi Bai International Airport; Hai Phong Dinh Vu seaport; Quang Ninh – Cai Lan deep seaport and surrounding key cities and provinces.
Savills Industrials Vietnam, one of Savills’ best industrial real estate offices, provides bespoke lease and investment advice to occupiers, developers, and investors. Savills Industrials aims to provide reliable advice, investment assistance, and Vietnam Industrial market updates.
Download our full version of Savills Industrial’s 2022 market update.