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Why is the rental price of industrial park land in the South higher than that in the North?

The rental price of industrial zone land is forecasted to continue to increase in 2021. (Photo: Sonadezi.com).

According to SSI Research, the price of land rentals in the industrial zones of the South has been higher than that in the North partly due to the high occupancy rate of industrial zones in the South.

In the recent 2021 industrial park real estate industry prospect report, SSI Securities Joint Stock Company (SSI Research) stated that the COVID-19 translation has caused serious disruption in the supply chain and businesses have pushed quickly diversifying the supply chain to Vietnam.

However, due to outbreaks, international flights in and out of Vietnam were temporarily closed. This has caused difficulties in signing production contracts, affecting the rental progress of industrial zones in recent times.

Meanwhile, the average rental rate recently tends to increase strongly. Specifically, the land rental price in southern industrial zones such as Ho Chi Minh City, Binh Duong, Dong Nai, Ba Ria – Vung Tau all increased by 15-23% over the same period in 2020. And land rental in the zones Northern industry increased about 14% – 18% over the same period.

According to an analysis by SSI Research, the higher land rental rates in industrial zones in the South than in the North are due to the high occupancy rates of industrial zones in the South, especially in Ho Chi Minh City, Dong Nai and Binh. Duong, with capacity from 82% to 90%.

In addition, the expansion of the leased area of ​​the industrial zones in the South is facing many difficulties in the work of compensation and site clearance.

Also according to the report, listed industrial park developers have had a significant increase in rental rates.

For example, Long Hau 3 Industrial Park (Long An) increased 35% over the same period, Bau Bang Industrial Park (Binh Duong) increased 21%, Tan Phu Trung Industrial Park (HCMC) increased 31%, Sonadezi Chau Duc industry increased by 20% and Yen Phong expanded Industrial Park (Bac Ninh) increased by 10%.

Regarding the prospect for 2021, this securities company stated that the demand for land lease will increase strongly due to the shift of production from China to Vietnam. In particular, the COVID-19 epidemic has accelerated the shift in recent years and Vietnam is considered to be one of the countries benefiting from this trend.

“Once the epidemic subsides, the demand for Vietnam’s industrial zones will increase significantly as many international companies have previously prepared to relocate their production facilities to Vietnam. China to Vietnam is a big trend capable of accelerating the post-COVID-19 period “, it said.

Some big companies are planning to move part of their production activities from China to Vietnam such as Microsoft, Google, Panasonic, Sharp, Foxconn, … In the first quarter of 2021, Oppo has a plan. lease 62.7 ha in Nam Son Hap Linh Industrial Park and Pegatron will lease land in Deep C. IP IP.

Another bright spot is that the planning of Vietnam’s new industrial park in the period 2021-2025 can increase the area of ​​new leased land in the future, to meet the requirements of FDI enterprises.

In addition, the development of transport infrastructure such as Bien Hoa – Vung Tau Expressway, Dau Giay – Phan Thiet Expressway, North – South Expressway, Cai Mep – Thi Vai Port, … can help to connect conveniently. than with industrial zones.

Rent is also an advantage for Vietnam’s industrial real estate. Specifically, the rental price for industrial zones in Vietnam is still lower than some countries in the region (25-30% lower than Indonesia and Thailand).

According to this analytical unit, in 2021, the price of industrial park land in Vietnam is expected to grow by 7-8% in the South and 5-6% in the North.

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