Some factors such as positive indicators, company mergers and acquisitions, and an increase in new industrial land have contributed to the expansion of Vietnam’s industrial real estate sector. As a result, the industrial leasing cost in Vietnam is increasing remarkably in recent years despite the severe impacts of pandemics.
Overview of The Industrial Leasing Sector in Vietnam!
The Industrial Leasing Cost in Vietnam has Experienced a rising Trend
This year, the industrial real estate industry is likely to perform well, with property companies owning industrial parks benefiting from higher demand and rental pricing.
Public investment in developing infrastructure linking industrial parks boosts demand for a rental property in industrial sites.
The transportation projects in Bien Hoa – Vung Tau, Dau Giay – Phan Thiet, North – South, Thi Vai – Cai Mep port and Gemalink port. These are examples of infrastructural development that will generate easy traffic linking industrial parks.
Rental prices in industrial zones in Ho Chi Minh City and surrounding areas, such as Duong, Dong Nai, Long An and Ba Ria-Vung Tau, rose by 15. 8 percent more than the previous year.
Higher pricing was caused by a surge in new foreign direct investments into Vietnam after the country’s post-pandemic recovery, as well as increased company need to boost output.
Tenant demand has been concentrated chiefly in Vietnam’s major industries, including electronics, e-commerce, food, livestock, and fast-moving consumer products. These industries are rapidly increasing in Vietnam, and investors are eager to utilize the nation as a hub to access new markets.
The industrial leasing cost in Vietnam first-tier property markets has risen due to rising demand and the dwindling of land banks in industrial parks.
Furthermore, Vietnam has a golden population structure, with 60% of its people being highly youthful, dynamic, and diligent.
It also benefits from a favourable geographical position in Southeast Asia, home to numerous strong and active economies.
The nation’s economic expansion, followed by a jump in modern retail trends such as e-commerce and waves of foreign investment in assembly plants in Vietnam, will drive up demand for high-quality industrial property.
The construction of new industrial zones and the start-up of important industrial projects early this year bode well for the industry.
However, according to numerous experts, industrial estate developers will need to focus on environmental-related growth given the country’s environmental issues.
They stated that to maximize foreign investments, Vietnam needs to perform a complete examination of available resources, primarily land, as well as energy capacity.
It must also strengthen human resources, develop supporting sectors, and prioritize FDI projects that utilize cutting-edge technology.
The pandemic and the adjustments in administrative processes are putting a lot of pressure on the property market in general. Project delays frequently harm investors throughout the building period. This, along with the interruption of supply networks, has resulted in losses for their company.
Average Industrial Leasing Cost in Vietnam
With an average industrial leasing cost in Vietnam of $162 per square meter per lease period and an occupancy rate of 90 percent, HCMC led the market.
The growth rate of industrial park leasing cost in Vietnam for southern industrial powerhouses has been roughly 8-9 percent every year.
Rental costs in Dong Nai have risen from $110 to $155 per square meter. Meanwhile, Long An saw rents rise from $110 to $200 per square meter.
Rental rates increased in some northern regions as well, but not as much as in the south. Rental costs in Hanoi rose from $155 to $260 per square meter, whereas in Bac Giang, they fell from $55 to $110.
Warehouse and factory performance remained constant. Average industrial leasing cost in Vietnam grew 5-17 percent in new warehouse/ready-built manufacturing hubs, owing primarily to improved specifications.
Industrial land availability is predicted to expand by over 7,000 hectares in the Northern and Southern regions in 2022 and 2023.
Because of increased availability, average asking rents are expected to expand at a 4% annual pace in both regions.
Read more: Cold Storage Warehouse For Rent In Vietnam – The Innovation Of The Future
Reasons Why The Industrial Warehouse Space for Lease in Vietnam is Appealing to Foreign Investors
According to Cushman and Wakefield, a leading global real estate services firm, Vietnam remains an appealing destination for industrial property investors due to its stable annual growth, export-oriented industry, increased free trade agreements, young workforce, and preferential investment policies, and strategic location.
Vietnam has become an attractive destination for international investors looking to exit China with favourable incentive schemes, competitive labour costs, a stable political climate, a solid economic outlook, and free trade agreements.
Vietnam is a popular destination due to its abundant human resources, diverse free trade agreements, and government commitments to infrastructure development. If the pandemic can be contained swiftly, Vietnam will benefit from advances in the global supply chain.
There will be legal support so that the company may function and accept responsibility for any difficulties. The contract is an essential consideration for firms when renting a factory. It will protect both parties interests and the conditions and restrictions put into the agreement based on legal laws.
It would be best if you had the assistance of a trained team of specialists that specialize in industrial real estate and can help you assess and better comprehend all legal procedures and examine numerous possibilities before opting to invest.
The Competitive Industrial Leasing Cost in Vietnam
For clients wanting to rent a factory in Vietnam, the cost of renting a factory is frequently the first concern. Several variables impact the cost of renting a factory, including geography, the state of the plant, investment opportunities, and the surrounding environment.
Although rental prices tend to increase compared to other countries in the region, especially China, the industrial leasing cost in Vietnam are much more affordable.
Savills Industrials is The Most Reliable Provider for The Industrial Real Estate Leasing Sector in Vietnam
Reasons why You should choose Savills for your Business
1. Vietnam’s leading industrial real estate company
After significant expansion in the manufacturing and logistics sectors, Savills Vietnam introduced a full-service platform for industrial real estate in 2017.
Our complete manufacturing and logistics real estate consulting is provided by industry experts with deep market knowledge and experience. Our assistance extends from market access through planning and development, leasing, investment, appraisal, transaction, and disposal.
2. Advice of landlords
Savills Industrials Landlord Advisory service provides landlords and investors with project marketing opportunities at each stage of development. From the starting phases of a project through its completion and entry into operation, these Industrial Real Estate Services may give sales or leasing assistance.
Research and analysis have an impact on marketing advice. Savills Industrial Real Estate Services focuses on local, regional, and worldwide research that produces high-quality data and trustworthy market analysis.
3. Tenant representation
Finding the right Industrial Real Estate Services may be tricky. Savills Industrials Tenant Representatives will develop transaction processes that are systematic, avoiding costly risks while giving real rewards. By advising tenants in manufacturing, logistics, and e-commerce on on-site searches and evaluations of Vietnam’s industrial parks.
Understand real estate regulations and contractual processes to give lease renewal and rent review guidance. Offer innovative business and logistical solutions to help renters determine their optimum space requirements and deliver the best-fit solutions. Savills Industrial Real Estate Services aims to enable clients to make fully informed decisions before engaging in a lease arrangement. Services for space acquisition and leasing cost analysis for relocation or renewal. Please take a look at our success stories to see how we can meet your real estate needs.
4. Do in-depth market research
Gaining a competitive advantage necessitates a detailed understanding of the target audience, competitors, and market. Savills Industrial Real Estate Services provides granular and macro analysis to optimize performance to ensure that all market aspects are monitored for projects to have the highest chance of success. If you’re thinking of entering the market for the first time or broadening or extending your activities, Savills Industrial Services Department can support your purposes.
Read more: The Warehouse Or Factory Industrial Outlook In Vietnam: Expect The Rising Trend
Available Industrial Areas for Lease from Savills
– Location: Binh Xuyen District, Vinh Phuc Province
– Total area: 295 ha
– Vacant area: TBC ha
– Price: Contact
– Key features:
+ Convenient transportation links
+ Green & Smart Technology
+ Attractive incentives
+ Tech-driven platform
+ “One-stop” services
+ Abundant labour force
– Location: Hai An District, Hai Phong City
– Total area: 106,000 m2
– Vacant area: 59,778 m2
– Price: Contact
– Key features:
+ Cat Bi International Airport, Hai Phong Seaport, and motorways are all nearby. This cuts transit time and expenses.
+ Tax incentives
+ Supportive investors
+ Comprehensive infrastructure
– Location: Long An, Vietnam
– Total area: 119 ha
– Vacant area: 78 ha
– Price: Contact
– Key features:
+ Investment tax incentives
+ Strategic location
+ Supportive developers: legal services, HR process,…
+ Completed infrastructure
Savills Industrials Vietnam, one of the best industrial real estate offices, provides tailored lease and investment advice to occupiers, developers, and investors. Savills Industrials endeavours to provide reliable advice, financial assistance, and industrial consulting services. Don’t hesitate to get in touch with Savills if you have any inquiries regarding the information on the industrial leasing cost in Vietnam. If you are in need of industrial real estate buying, selling and leasing services with the help of experts, contact Mr. John Campbell for more information now!