Vietnam, with its strategic location, tremendous young labour force, foreign trade agreements, and strong and resilient economy has become a key destination for foreign investment flows, setting up a tremendous opportunity for ready-built factories and warehouses.
C.K. Tong, CEO of BW Industrial Development JSC, shared at Vietnam Industrial Property Forum held in Ho Chi Minh City on October 28 that digital technology and high-tech manufacturers are racing to build and expand production capacity in Vietnam. In the past nine months, many businesses have moved from China, with many choosing Vietnam as a destination.
“We can take a range of examples such as Foxconn, Sharp, Panasonic, Pegatron, LG, Google, Luxshare, Intel, TCL, and many others,” said C.K. Tong.
He added that many large scale investors have chosen Vietnam as a production base. For example, Samsung has built several factories in Vietnam. The investment shift of this “Queen Bee” has drawn along hundreds of other foreign suppliers to Vietnam.
“They are not moving alone as specialised manufacturing is the key for production capacity and this leads to a migration of the whole supply chain ecosystem,” he cited.
Recently, BW Industrial Development has received inquiries from companies originating in Europe. And these businesses also have factories located in China.
These companies, however, are facing a number of challenges including capital, location to build, licensing, and workforce. The ready-built warehouse and factory sector is, therefore, a good solution for them to build a manufacturing base in Vietnam and this is an opportunity for BW Industrial Development.
BW Industrial Development provides ready-built factories with flexible rental area (minimum 500 square metres), flexible payment terms, easy to manage cash flows, support in getting construction licenses, and simplified licensing procedures, and a professional management team.
“BW is helping its partners to get construction certificates as quickly as we can,” he said.
“We aim to support the drive of manufacturing, industry, and logistics in the country by offering best-in-class construction, flexible sizes, various locations, and one-stop services,” he added.
Tong added that BW Industrial Development has also seen increasing demand from domestic companies. In fact, domestic companies are one of the main growth sources for the industrial property sector, with furniture companies in particular requiring large spaces.
BW Industrial Development is a joint venture between Becamex, the largest state-owned enterprise in industrial and infrastructure development in Vietnam with more than 16,000 hectares of land bank, and Warburg Pincus, the largest international private equity investor in Vietnam with a strong track record in real estate.
The company has become the No.1 developer in Vietnam with over 12 million sq.m of gross floor area at the end of 2020. As of the third quarter of 2020, BW had 21 projects in key industrial hubs nationwide, including ready-built factories, logistics warehouses, as well as sale-and-leaseback units.
The company’s strategy is to buy land plots and develop them for lease. In its vision to 2020, it will be the No.1 developer of industrial rental properties in Vietnam, with the largest market share.