Industrial property in the Northern Key Economic Zone (NKEZ) saw strong development in the third quarter of this year, according to Jones Lang LaSalle firm (JLL Việt Nam).

 

In the first nine months of this year, the occupancy rate recorded in all existing industrial parks (IPs) across the five most dynamic cities and provinces in the NKEZ, including Hà Nội, Hải Phòng, Bắc Ninh, Hưng Yên and Hải Dương, averaged 69 per cent, an increase of 200 basis points compared to the previous data cycle in the first quarter of this year. The top rates were in Hà Nội and Hưng Yên.

 

The NKEZ stands out as having suitable features for enterprises to set up operations, Nguyễn Hồng Vân, JLL Việt Nam’s Director of Markets, said at a press conference held in Hà Nội on October 11.

 

Up to the third quarter of this year, the total leasable industrial land area stood at 9,371ha, of which the largest supply was in Hải Phòng, followed by Bắc Ninh, according to JLL Việt Nam.

 

Bắc Ninh and Hải Phòng, the two leading industrial markets still have sufficient vacant land areas to capitalise on rising demand.

 

Further, new supply from subsequent phases of existing industrial parks and newly developed ones in strategic locations have also offered more options, making these two provinces the most desirable areas in north Việt Nam, she said.

 

The average industrial land price in the third quarter hit US$95 per sq.m per lease term, an increase of 6.7 per cent year on year (y-o-y), Vân said.

 

Aside from Hà Nội as the economic centre with the highest price, Bắc Ninh and Hải Phòng still post leading prices thanks to their strong industrial foundation with well-known tenants, strategic location and established infrastructure.

 

Hải Dương and Hưng Yên still kept their prices at reasonable levels. Average monthly rents for factory ranged from $4-5 per sq.m per month. This rent remained flat compared to the first quarter.

 

The strong development in the manufacturing sector across provinces has also brought with it the great potential for the establishment of other real estate sectors. This has been proven by strong investment pouring into the real estate market in the northern provinces as witnessed recently.

 

With an increasing proportion of FDI pouring into the north over the past decade, Hải Phòng, Bắc Ninh, Hưng Yên and Quảng Ninh are also fast becoming focal points for investment apart from Hà Nội, according to JLL Việt Nam.

 

The BCI Asia statistic shows that, after Hà Nội, Hải Phòng, Bắc Ninh, Quảng Ninh and Hưng Yên are the top provinces in terms of the number of real estate developments. Apart from Quảng Ninh, well-known for its Hạ Long Bay and Vân Đồn Special economic zone, the other three provinces have consistently led the north regarding industrial developments.

 

Bắc Ninh and Hải Phòng markets are strongly driven by residential projects being developed to capitalise on the growing housing demand from an increasing number of migrants and expats working in the provinces.

 

Unlike Bắc Ninh and Hải Phòng where most developments are concentrated in the city centre, most projects in Hưng Yên cluster along its boundary with Hà Nội, to benefit from the existing demand in this big city. Home to Hạ Long Bay, Quảng Ninh has been on the radar of many well-known developers, focusing on vacation and tourism-related properties.

 

About 615 ha is planned to be launched during the next 12-month period. Steady price growth for industrial land in the North of Việt Nam is expected through this year end due to strong investor appetite. New investors, largely from Asian countries such as Japan, South Korea and China, will remain keen on Việt Nam’s industrial property. – VNS