Extending Industrial Zone Massively

A series of industrial parks in Ho Chi Minh City, Binh Duong and Dong Nai are expanding in size because of the promising investment channel. The rents of industrial parks in Ho Chi Minh City are also double that of neighboring provinces.

HCMC has 4 projects

According to Cushman & Wakefield, Ho Chi Minh City has nearly 20 industrial parks with the total area of 3,940 ha. The average duration of land use rights is 35 years. Occupancy rates in industrial zones averaged 65%. This rate is low due to the fact that new industrial zones have few businesses.

Particularly, industrial parks in districts 2, 7, 12, Thu Duc, Tan Phu and Binh Tan have been closed. Only industrial parks in Nha Be, Binh Chanh and Cu Chi are vacant. Of which, Binh Chanh has 3 industrial zones but 74% of the area is vacant.

Many industrial parks in Ho Chi Minh City are also expanding. For example, Le Minh Xuan industrial zone is under construction phase 3 with a size of 231 ha. Total investment in the third phase is nearly VND1,150 billion.

In particular, Binh Chanh Construction Investment Joint Stock Company will contribute 47.92% of capital, equivalent to 550 billion. Capital contribution to December, the remaining nearly VND600 billion is the loan and advance capital of customers. Time to raise capital by the end of 2018. Currently, Le Minh Xuan industrial park has occupancy rates of 100%, attracting 175 projects with total capital of nearly $200 million.

Another project is being built in the North West Cu Chi Industrial Zone, with the second phase with 173 hectares. According to the design, this industrial park will devote more than 107 hectares to the factory land, industrial enterprises. 30 hectares of land for transportation, yards and the remaining area will be built treasures, technical infrastructure works, parks, trees, water surface.

Northwest Cu Chi industrial zone, phase 2 is expanding to 173 hectares

The first phase of the North-West Industrial Park of Cu Chi has filled 98% of the factory land area, attracting 42 domestic and foreign enterprises and providing jobs for nearly 7,000 laborers.

In addition, Ho Chi Minh City has two industrial parks are clearing and compensation for land for the project is Hiep Phuoc Phase 3 and Vinh Loc 1 phase 3. Stage 1 of Hiep Phuoc Industrial Park in The area of 310 hectares has attracted 97 investment projects with a total registered capital of VND12 trillion.

Hiep Phuoc Industrial Park Corporation is developing phase 3 on an area of 1,000 ha. Phase 3 of the Hiep Phuoc Industrial Park has planned three main zones. In addition to the Viet Nhat Technology Park, two more are being planned to invest in infrastructure. There will be lots of land around 1,500 – 2,700 sqm for small businesses who need to build a factory.

Hiep Phuoc Industrial Park Joint Stock Company has built bridges leading to industrial zones such as Rach Rach 1 and Muong Lon 1. Hiep Phuoc has proposed to continue investment in phase 2 of Hiep Phuoc. These two bridges with a total capital of around VND350 billion will be used to complete the access road to Hiep Phuoc and Hiep Phuoc industrial zones.

Meanwhile, Vinh Loc 1 industrial zone is being cleared and compensated with an area of 200 ha in Binh Chanh district.

Scattering in the province

Not only Ho Chi Minh City, a series of industrial parks in the provinces also rampant expansion. For example, after 20 years of establishment, Vietnam-Singapore Industrial Park (VSIP) has 7 industrial zones in 3 regions, stretching in Binh Duong, Bac Ninh, Hai Phong, Quang Ngai, Hai Duong and Nghe An with the total area of 6,600ha.

Hiep Phuoc Industrial Zone continues to develop phase 3 on an area of 1,000ha

VSIP is exploring the possibility of implementing two VSIP expansion projects in Binh Duong and Bac Ninh. These two expansion projects have 1,500 ha. VSIP is a joint venture between Becamex IDC (49% owned) and Sembcorp (51% owned by Sembcorp). Sembcorp holds a 92.9% stake in the alliance.

Similarly, Long Duc Industrial Park in Dong Nai has filled up 60% of its area. Investors are looking to expand the second phase. Long Duc is located in Long Thanh district, with a total area of 282 ha. Investors are a joint venture between three Japanese corporations, including Sojitz Corporation, Daiwa House Industry, Kobelco Eco-Solution and Vietnam’s Donafood Company.

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Similarly, Long Thanh Urban Joint Stock Company is completing the construction zoning plan 1/2000 scale and inventory, compensation and site clearance to build Long Thanh high-tech industrial zone. Amata Long Thanh was established by Amata Vietnam Joint Stock Company, Amata VN Public Company Limited and Somhatai Panichewa of Thai Amata Group.

Long Thanh Hi-tech Park has a total registered capital of more than the US $ 282 million and is located in an area of over 410 hectares in Tam An, An Phuoc and Long Thanh communes. This is the first hi-tech industrial zone of Dong Nai province. Expected to be completed by 2020.

Realizing that the potential market, DRC has increased its stake in Binh Duong JSC to 51%, bringing KSB became DRH’s subsidiary. Mr. Phan Tan Dat, General Director of DRH said that KSG has the first phase of the industrial park in Nha Trang with an area of 136ha in Bac Tan Uyen.

“With the rental price is $ 55 / sqm but the first phase is full. We are expanding the industrial park in the second phase with 200ha. This is the right direction and I believe it will be successful, “Dat said.

Dat Cuoc Industrial Park is located at $55 / sqm

Cushman & Wakefield assessed, with the TPP Agreement and other FTAs recently acceded to by Vietnam, combined with stable economic conditions, state support policies and labor costs. Vietnam will attract investment from foreign manufacturers.

The trend in the future is that foreign investors can move their production activities to Vietnam to enjoy tax incentives. Demand for industrial land is on the rise, making this segment a promising investment.

“The lowest rent in Ho Chi Minh City is VND1.52 million / sqm in total for the Cu Chi industrial zone. The highest price is in district 7, up to VND5.8 million sqm per total lease term. The rent for industrial zones in Ho Chi Minh City is about double that of neighboring provinces like Binh Duong and Dong Nai, “Cushman & Wakefield reports.

From now to 2030, Cushman & Wakefield said that the land fund for industrial parks in Ho Chi Minh City will increase by 2,600ha with 10 new industrial parks.

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