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PROPERTY

Tier 1 market in North and South
North South
ha % ha %
1,500 100 1,500 100
1,200 80 1,200 80

900 60 900 60
600 40 600 40

300 20 300 20
0 0 0 0
2019 2020 2021 2022 2023 2019 2020 2021 2022 2023
Absorption of industrial land Occupancy rate of industrial land Source: CBRE

foreign investment are expected to con- that despite its multiple free trade agree- In addition, many new investment
tribute to the robust development of indus- ments (FTAs), rising labor and construc- projects in IPs have been approved for
trial real estate in Vietnam in 2024, such tion costs are eroding Vietnam’s cost investment and are entering subsequent
as Singapore, Japan, South Korea, China, advantages. This shift is evident in land phases. The supply of industrial real estate
and South Korea. The flow of FDI into prices, with greater Bangkok boasting is growing in both the northern and south-
the country continues to increase signifi- industrial land prices of $82-164 per sq ern regions, and demand remains high,
cantly, with the expansion of production m per lease term, which is now lower especially for multi-purpose warehouses
by multinational corporations such as than Hanoi’s $80-250 and Ho Chi Minh and ready-built factories.
Amkor, Apple, Marvell, and Lego, among City’s $95-280. “While industrial and man- Another notable point is that the trend
others, which leads to growing demand ufacturing property in Vietnam will con- of developing IPs based on an ecological
for location surveys from manufacturers, tinue to be a significant segment, attracting model in Vietnam is being regarded as
e-commerce companies, and logistics new manufacturers and filling ready-built crucial for minimizing environmental
providers, creating strong demand in the facilities will present challenges in 2024,” impacts, promoting sustainable growth,
country’s industrial real estate market. he emphasized. and achieving high efficiency in attracting
Knight Frank remains optimistic about investment, particularly FDI. Furthermore,
PROSPECTS IN 2024 the long-term prospects, citing a GDP industrial developers such as Core5, Deep
Vietnam is on the path to joining the growth forecast in the range of 4.7-5 per C, Emergent, LOGOS, SLP, and YCH, and
hundred-billion-dollar global semicon- cent for 2023 from the IMF and HSBC. manufacturers like Pandora and Lego have
ductor industry and becoming a destina- Vietnam’s commitment to infrastructure been early adopters of environmentally-
tion of interest for many leading global spending is among the strongest in the conscious design and construction over
semiconductor component manufacturers. region, and the data center market is poised the last few years, and this is expected to
Specifically, Intel has established its largest for transformation, contingent upon reg- be adopted in 2024 as the “new normal”
assembly and testing plant, at the Saigon ulatory challenges being eased and a focus for future development. “IPs are also a
High-Tech Park (SHTP) in Ho Chi Minh on power infrastructure. “We made many good environment to test more technologies
City, which accounts for over 50 per cent of these predictions in early 2022, and they and construction techniques, and I would
of its total global production. Synopsys, are mostly playing out as expected,” said expect to see more renewable power and
based in California, has deployed a semi- Mr. Crane. “The ongoing consolidation more efficient waste management in the
conductor incubation and design center among developers and investors in indus- longer term, and possibly more use, or
in cooperation with SHTP. Marvell is also trial and logistics real estate, while chal- reuse, of less impactful materials in building
active, while, in particular, Apple has lenging for occupiers as fewer landlords construction,” Mr. Crane added. %
completed the transfer of eleven manu- means less
facturing plants for audio-visual devices competition, is
to Vietnam, and Denmark’s Lego Group a trend that will
is investing in building a factory in south- unfold over
ern Binh Duong province. many more
Mr. Stephen Higgins, Head of Capital years, present-
Markets Vietnam at Cushman & Wake- ing good
field, said investment funds are beginning opportunities
to explore and engage with Vietnam. Dis- for inbound
cussions about the country’s real estate investors and
market often focus on residential segments, occupiers in the
but these funds are keen on segments near and mid-
such as industrial and logistics. “In the term, especially
industrial real estate sector, investors focus when consult-
on three main products: industrial parks, ing with the
rental warehouses, and rental storage right independ-
spaces,” he said. ent real estate
Looking ahead to 2024, Mr. Crane said partners.”

en.vneconomy.vn FEBRUARY 2024 | VIETNAM ECONOMIC TIMES | 41