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Jones Lang LaSalle (JLL) Vietnam recently released a report on the industrial rental market in the Southeast.
The most prominent point is the continuous price increase of industrial land in Ho Chi Minh City. Although the city is in the top places with the most expensive industrial land in the country.
Specifically, in the fourth quarter of 2017, the average per m2 of industrial land (excluding infrastructure management and VAT) in industrial parks in HCMC was $ 143 per square meter per rental period. . The price has increased 2.3% compared to Q3 / 2017 and 3.8% over the same period last year.
Compared to the beginning of last year, the current price of land has risen a lot. Specifically, in the first phase of 2016, the price of industrial land in Ho Chi Minh City is only $126 / sqm / cycle rent. At present, the price hike has jumped to $ 143.4 / sqm / cycle (up $ 17.4 / sqm / cycle) in just two years.
Meanwhile, industrial real estate in the group of houses and workshops built in HCM City also has rents ranging from $ 2.5 / sqm / month to $ 5 / sqm / month.
The occupancy rate of industrial parks in the South East in particular and HCMC is very high. Except for Ba Ria – Vung Tau, the index is currently at 57%.
All remaining localities in this area, including HCM City, Dong Nai, Binh Duong, Tay Ninh and Binh Phuoc, have leased up to 70% of the total area. Especially Binh Duong, which is the most industrialized city in the country and has investments from China, Singapore, etc., has occupancy rate of 85%.
JLL estimates that the capacity of industrial parks in HCM City will continue to grow rapidly in 2018. Despite forecasts, the industrial land rents in this area will increase rapidly in the coming years.
JLL said that the cause of this growth is due to the fact that the leading brands in Vietnam’s garment, leather and footwear and sportswear industries are moving into the southern market. The demand for good workshops and related services in the industrial park in Ho Chi Minh City is meeting the requirements well.
Ho Chi Minh City will rise to become the ideal destination of the southern industrial parks thanks to the convenient transportation links with the system of seaports with increasing capacity. Particularly, Cat Lai deep-water port has recently increased the capacity of ships that can dock.
Currently, the leasing fee for industrial zones in Binh Duong is $65.8 / sqm for a 50-year lease period (excluding service charges and VAT), which is relatively soft compared to the price in Dong Nai ($76.4 / sqm). / cycle) and only half as expensive as HCMC ($143.4 / sqm / cycle). This shows that HCMC is leading the price of rent compared to the rest of the market.
The supply of land for the southern industrial zones, including Ho Chi Minh City, Dong Nai, Binh Duong, Ba Ria – Vung Tau, Tay Ninh and Binh Phuoc, will be 24,000 hectares.
And in the last three months of the year, there is no new supply added to the market. But average rents in HCMC’s industrial parks remained a slight 2% increase compared to the same period last year, according to Cushman & Wakefield (C & W).
This unit also recently published a report on the real estate industry in HCMC in early 2018.
Accordingly, the average rent on the market is at 2.87 million m2, equivalent to 129 USD per m2. Slightly increase with a small amplitude, but shows that this bull cycle continues.
The increase was mainly due to higher rents from industrial zones. Premises with an area of between 2,000-3,000 sqm are offered for rent at VND 56,000 to 112,000 / sqm per month (equivalent to $2.5-5). And all the asking prices do not include value added tax (VAT).
The market of TP. HCM has 19 industrial parks with total area of 3,940 ha. Of them, area occupied about 63% of the total area. In that time period the average land area is still about 35 years.
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In general, rents and occupancy levels are still fluctuating slightly each year. But growth is still the picture of the whole market.
Industrial land plots in HCMC are expected to increase by 2,600 hectares from 10 new projects by 2030. That means that 66% more land will be added to the current. However, most of these projects are currently only in the clearance phase. Should this increase in land area is likely to last until 2040.
C & W assessments, the impact of trade agreements that Vietnam recently signed will make the industrial land market of HCMC continue to increase rapidly. Especially foreign companies will appear more and more in this market.
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