Tay Ninh industrial parks have great potential in attracting investment

The land fund of the industrial zone gradually becomes scarce, and the high rents have made areas that used to be the capitals of industrial real estate such as Ho Chi Minh City, Binh Duong province seem to be gradually reducing the attractiveness of foreign investors. Therefore, choosing other other industrial parks near Ho Chi Minh in the South Vietnam is considered industrial investment choice for many investors with large-scale land rental needs.

Data from Savills Vietnam shows that, in the southern region, the provinces of Dong Nai and Binh Duong are the localities with the largest supply of industrial real estate with an area of ​​10,066 hectares and 10,156 hectares, respectively, and occupancy rates. Full up to 99% with high rent.

Meanwhile, in neighboring areas such as Tay Ninh province, the supply is less, the occupancy rate is only about 65-66% and especially the rental price is also moderate. This is one of the reasons why many foreign investment units are gradually moving to cities and provinces that are not regions with a long history of industrial development, such as industrial parks in Tay Ninh.

According to an expert from Savills Vietnam's Industrial Real Estate Department, due to the fact, the vacant land area of ​​industrial zones in key areas such as Binh Duong and Dong Nai is gradually becoming scarce. Meanwhile, Tay Ninh not only has a large land bank but also has a very competitive rental price compared to Ho Chi Minh City. Ho Chi Minh City and Binh Duong or Dong Nai.

Some companies are considering provinces to replace "high fever" industrial capitals like Tay Ninh and that is why this year has seen large production investments in such locations as Jinyu Tire from Hong Kong with a total investment of 300 million USD in Phuoc Dong industrial park, Tay Ninh.

"When these companies invest in places like Tay Ninh, even though they are further away from the central area, they will have the opportunity to increase the size of their factories in the future or their suppliers can earn money. land near them,” the expert added.

According to the Ministry of Planning and Investment, newly registered FDI capital in the manufacturing industry by province in the first nine months of 2020 Tay Ninh ranked first in the southern region, attracting FDI with a total value of 348.4 million USD, surpassing Binh Duong with a total value of 342 million USD.

Speaking more about Vietnam's industrial real estate, Savills experts said that, in addition to benefiting from FDI sources, Vietnam's industrial real estate segment is also receiving many advantages from agreements. free trade agreements, as well as the trend of moving factories and investment capital from China to Southeast Asian countries, including Vietnam.

The prolonged Covid-19 pandemic is even expected to be a factor in accelerating the relocation of production facilities of multinational companies out of China. Most notably, Apple Computers, Pegatron and Foxconn have announced plans to move to or expand production in Vietnam.

“The China + 1 model may be increasingly pursued by manufacturers, leading to greater demand for Vietnam's industrial real estate market, as corporations seek to reduce risk and diversify production location. Industrial real estate will continue to be the 'baby' of the real estate industry in general, with growing demand and increased capital market activity," emphasized Savills expert.

Savills experts also believe that the "China +1" strategy will certainly be effective in the near future when many corporations are looking for ways to reduce risks and diversify locations. This will strengthen the pursuit to own industrial real estate in general in key economic zones.

Source: Vneconomy (November 2020)