2022 IS THE YEAR OF INDUSTRIAL REAL ESTATE?

Many supportive policies from the Government

According to a report by Savills Vietnam, in terms of trade, the total import-export turnover in the first 8 months of 2021 was estimated at $428.81 billion, up 27.2% over the same period last year. The European-Vietnam Free Trade Agreement brings many benefits to the economy in general.

Vietnam leads the Southeast Asia data center market and is forecast to grow at a compound annual growth rate (CAGR) of 14.6%, reaching $1.6 billion by 2025. This is driven by the growing popularity of big data, Internet, and cloud-based solutions.

With newly registered foreign direct investment (FDI) capital, the manufacturing and manufacturing sector has reached a total registered FDI capital of 11.83 billion USD with 402 newly licensed projects, accounting for 53.42% of the total capital. FDI capital increased by 16.45% over the same period last year.

Protecting the interests of foreign investors is a priority for the Government as foreign capital is the key to Vietnam's economic recovery and development. In September, Prime Minister Pham Minh Chinh visited a Samsung factory, where he reaffirmed the Government's commitment to protecting the interests of FDI investors. The Prime Minister also met and assured American business leaders that the difficulties the pandemic brings to Vietnam is only temporary.

Besides the encouraging reopening plan, the Government's dedicated support for foreign investors, along with the absolute resilience and adaptability of domestic businesses have reassured that the country will not only recover, but will likely come back stronger than ever.

Trends with the potential to break out in 2022

In terms of industrial land supply, despite the new Covid-19 outbreak in Vietnam, a number of new industrial parks have been established and key industrial projects have started operations. In the first 6 months of 2021, 25 new industrial parks were established - an increase of 19 industrial parks compared to the same period last year.

Compared to last year, occupancy rates in industrial zones in some provinces increased but remained stable in general. Due to many restrictions on travel and relatively stable occupancy rates, prices increased modestly compared to 2018-2020. However, some provinces such as Hung Yen and Ba Ria - Vung Tau saw a sharp increase in rents compared to the same period last year.

Lockdowns and travel restrictions have slowed business relocation out of China as scheduled for 2021. However, developers believe rentals will be more efficient in 2022; tenants and investors will also have a choice of new supply when restrictions are lifted.

Demand for industrial and logistics land, in addition to ready-made warehouses, will continue to be the main demand of the market next year. However, in terms of trends, demand for data centers and cold storage is on the rise and gaining traction in 2020 and 2021.

Vietnam is expected to continue developing along the value chain thanks to its stable growth rate, business environment, FTAs and relocation out of China. In 2022 and the following years, some trends are expected to continue to appear, such as: Industry 4.0 and smart manufacturing; Supply chain modernization; Form of Sale - Lease of the property; New industrial park models and modern master plans; Data centers, cold storage…

Source: baoxaydung.com.vn