## A New Race for Industrial Real Estate in Vietnam
The New Race
Deputy Prime Minister Tran Hong Ha has recently approved the investment policy for the Bau Can – Tan Hiep Industrial Park (IP) (phase 1) in Long Thanh district, Dong Nai province. The project is invested by Tan Hiep Industrial Park Joint Stock Company.
Currently, Dong Nai has 31 operating IPs, and in the future, there will be 8 new IPs, including Long Duc phase 2, Long Duc 3, Cam My, Gia Kiem, Phuoc Binh, Phuoc Binh 2, Bau Can – Tan Hiep, and Xuan Que – Song Nhan.
Industrial real estate is attracting many investors. |
In Ba Ria – Vung Tau, Deputy Prime Minister Tran Hong Ha approved the investment policy for the expansion of My Xuan B1 – Conac IP with a scale of 110 ha. The IP is located in Phu My town, with a total investment capital of VND 1,989 billion. The investor is Petroleum Construction Joint Stock Company Idico.
My Xuan B1 – Conac IP was granted an investment certificate in 2012, with 163 ha of industrial land for lease. With a high occupancy rate, Idico proposed to expand the IP by an additional 110 ha.
Currently, Ba Ria – Vung Tau has 13 operating IPs with a total area of 7,243 ha. In the future, there will be 4 new IPs, including Dau Khi Long Son, Van Thuong, HD Urban IP, and My Xuan B1 – Conac expanded, with a total area of 1,810 ha.
Phat Dat Real Estate Development Joint Stock Company (stock code: PDR) and Thanh Binh Phu My Joint Stock Company have just signed a strategic cooperation agreement to develop industrial real estate projects – logistics, residential, commercial, and service projects. Accordingly, Phat Dat and Thanh Binh Phu My will jointly develop IPs following the model of a typical, ecological IP, and applying information technology in management and operation. This model will be similar to the specialized IP of Phu My 3.
Viglacera Corporation will establish new legal entities and branches to implement projects such as Phu Ninh IP (400 ha) and Bac Son IP (200 ha) in Phu Tho, Dong Mai expanded IP (150 ha) in Quang Ninh, and Tay Phu Yen IP (868 ha)…
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Not only Vietnamese enterprises but also foreign-invested enterprises have poured a large amount of capital into industrial real estate this year. Specifically, CapitaLand Investment, a subsidiary of CapitaLand Group, plans to invest an additional $110 million in Vietnam to expand its industrial real estate portfolio.
Prosperous Business
In the context of the real estate market still facing difficulties, enterprises in the IP group have recorded positive business results.
For example, Idico Corporation (stock code: IDC) achieved a 58% growth in revenue and 3.2 times profit compared to the same period last year, thanks to one-time revenue recognition from an industrial infrastructure lease contract. The business cash flow recorded over VND 3,580 billion in the first nine months.
Idico is investing in and managing about 10 IPs with a total area of more than 3,260 ha. Of which, there are about 5 IPs in the leasing phase, including Phu My 2 and Phu My 2 expansion (Ba Ria – Vung Tau) with rental prices of $130 – 132/m2/lease cycle, Cau Nghin IP (Thai Binh), Huu Thanh IP (Long An), and Que Vo 2 IP (Bac Ninh).
 Many IP businesses are prospering. |
Sai Gon VRG Investment Joint Stock Company (stock code: SIP) achieved a 16% growth in revenue and a 56% increase in profit in the third quarter of this year. These results were contributed by the service provision segment (electricity and water supply for IPs) and dividends, profits from investment sales.
SIP is operating 4 IPs (Phuoc Dong, Dong Nam, Le Minh Xuan 3, Loc An – Binh Son) with a total area of more than 3,200 ha, of which there are still more than 1,000 ha of commercial land not yet for lease, distributed in Tay Ninh, Dong Nai, and Ho Chi Minh City.
Sonadezi Corporation (stock code: SNZ) has a positive business cash flow of nearly VND 2,300 billion. In the third quarter of this year, revenue from land and infrastructure leasing in IPs reached VND 335 billion.
Sonadezi’s portfolio of operating projects includes Chau Duc IP (1,556 ha in Ba Ria – Vung Tau), Tan Duc IP (300 ha in Binh Thuan), Quang Trung Waste Treatment Area (130 ha in Dong Nai), and Long Binh Tan Port No. 3 (5,000 DWT in Dong Nai).
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Mr. John Campbell, Director and Head of Industrial Real Estate, Savills Vietnam, said that strong FDI inflows, strategic location, competitive costs, e-commerce growth, open trade policies, and Vietnam’s role in the global supply chain will be essential for the long-term supply and efficiency of the industrial real estate segment. Notably, with the development of e-commerce and increasing FDI, the demand for warehouses and built-up industrial land has surged. |
Duy Quang
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