Industry Snapshot – Industrial Property

INDUSTRIAL PROPERTY SEGMENT

FDI continues to be a key growth driver: In 1H2024, registered FDI reached USD15.2 bn (+13.1% YoY) and disbursed FDI was USD10.8 bn (+8.2 % YoY). Bac Ninh rose to be the #1 province in the country in attracting registered FDI in 1H2024 thanks to Amkor’s semiconductor material production project with additional investment capital of USD1.07 bn.

Land rental prices and occupancy rate increased slightly: In 2Q2024, land rental price in the northern region was USD134/sqm/remaining term (+4.5% YoY) while that in the southern region was USD173/sqm/remaining term (+1% YoY). It is expected that rental prices in the 2024-2026 period will continue to grow by 3-7%/year. The northern region’s occupancy rate was around 83% (+0.4% YoY) while the southern region’s occupancy rate increased to 92% (+6.5% YoY).

Warehouse and factory rental prices increased slightly: Factory rental prices increased by 1.9% YoY in the North and 1% YoY in the South, to nearly USD4.9/sqm/month in 2Q2024. Warehouse rental prices declined 1% YoY in the North and increased 2% YoY in the South, to USD4.5-4.6/sqm/month. It is expected that rental prices will increase slightly by 0-3.5%/year in the 2024-2026 period.

Opportunities & Challenges: China+1 trend, China-Taiwan tensions, strengthening relationship with major economies, accelerating infrastructure investment, competitive costs but the cost advantage is on the decline, no unified solution to overcome the global minimum tax problem.

Industrial land bank is contracting: Currently, the remaining land available for lease is limited, especially in the southern region, so companies are actively expanding their land bank, in which the advantage is in favor of companies with rubber land that is allowed to transfer to industrial land such as Vietnam Rubber Group (GVR) and Phuoc Hoa Rubber (PHR) or companies that have attracted large international corporations for many years such as Kinh Bac (KBC), Viglacera (VGC) and IDICO (IDC).