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Industrial land rental prices in the North are nearly 30% lower than in the South.

HQ (according to VnExpress) December 13, 2024 11:09

Industrial land rental prices in the North average $132 per square meter, 28% lower than in the South, creating an advantage in attracting high-value industries, according to Savills.

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Infrastructure of Yen Phong Industrial Park, Bac Ninh Province

According to a report by real estate consultancy Savills, industrial real estate in the North has a greater resilience than other areas thanks to advantages in rental prices, land funds and infrastructure. This helps the average occupancy rate of industrial parks here reach 78%.

Specifically, rental prices in the Northern provinces averaged 132 USD per square meter with long-term leases, 28% lower than in the South.

Savills cited Bac Ninh province as having a rental price 12% higher than the regional average, averaging $148 per square meter, but still lower than the $183 in the South. The province also leads the supply of ready-built factories and warehouses, accounting for 40% of the market share in the North.

Similarly, research firm Avison Young also said the cost of renting public land
The industrial parks in the key economic regions of the North are competitive compared to those in the South. For example, the average land rental price of industrial parks in Hanoi is 221 USD per square meter for a long-term contract, nearly 9% lower than that in Ho Chi Minh City.

Regarding land funds, Savills pointed out that in the first half of this year, the northern industrial provinces provided nearly 13,000 hectares of land for 73 projects, an increase of 12% over the same period last year. Many localities expanded industrial parks such as Hai Phong, Hung Yen, and Hai Duong.

In particular, infrastructure gives the Northern market more advantages than the Southern market in attracting foreign investors in the industrial sector. Accordingly, the Northern Key Economic Zone has a strategic location near China and the North Asian market, facilitating industries focusing on production.

The Northern region also accounts for 61% of the total length of highways in the country. Many highways connect industrial zones in the region with Hanoi and the Chinese border, increasing the attractiveness of this market to foreign investors.

These advantages have helped the North become the leading attractive destination for foreign investors. In the first 9 months of the year, the total newly registered FDI capital in this region accounted for nearly 60% of the country, with 5.3 billion USD, while the South accounted for about 38%.

The manufacturing sector accounts for 48% of the total newly registered FDI capital in the Northern region, focusing on high-value industries such as automobiles and electronics. The region also attracts 7 out of the top 10 corporations in the semiconductor sector. Bac Ninh alone has 4 large corporations, including Samsung Electronics, Amkor Technology, Hanmi Semiconductor and Victory Giang.

In order for Vietnam's industrial real estate industry to maintain its attractiveness and growth, Mr. Thomas Rooney - Senior Manager of Industrial Real Estate Services (Savills Hanoi) said that synchronous planning of infrastructure, transportation systems, and improving labor productivity are essential. In fact, the labor force in the North is quite abundant but most of them are low-skilled.

In addition, investors need to focus on sustainable development and green project construction. Mr. Thomas acknowledged that most industrial parks in Vietnam are developed according to the traditional model, while the current world trend prioritizes environmentally friendly projects. Greening industrial parks brings many advantages to factories and warehouses, but the conversion process is not simple because it is costly and time-consuming.

Therefore, experts recommend that management agencies consider the legal framework, preferential policies as well as credit support for investors to reduce the burden of initial costs.

HQ (according to VnExpress)
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Industrial land rental prices in the North are nearly 30% lower than in the South.