“Waves” real estate investment in industrial parks
Besides the wave of production shift of other countries, Vietnam’s participation in many trade agreements is a huge advantage for the developed industrial real estate segment. According to experts’ forecast, this is considered a rare bright spot of the market right in the time of Covid-19 epidemic and is expected to create “waves” in the coming period.
Experts believe that the effective Vietnam – European Union Free Trade Agreement (EVFTA) will create more advantages to attract investment capital for the real estate market, especially industrial real estate.
Troy Griffiths, Deputy General Director of Savills Vietnam, said that this Agreement shows the Government’s commitment to making Vietnam a leading destination in the manufacturing industry in Asia. Bilateral trade activity is likely to increase, leading to an increase in FDI inflows, increasing employment and more opportunities across all real estate segments including industrial real estate.
Sharing the same view, TSSu Ngoc Khuong, senior director of Savills, said that many groups of investors are looking for land funds of 500 to 1,000 hectares to invest in industrial parks. Many manufacturers want to invest in increasing the factory area so the industrial real estate market in big provinces and cities like Hanoi, Ho Chi Minh City, Long An, Binh Duong, Dong Nai is forecasted to have opportunities. Huge development.
According to a representative of CBRE Vietnam, recently the demand for industrial land has increased, the supply has not met. CBRE’s survey showed that in Dong Nai and Ho Chi Minh City, warehouse rent is approximately 5 USD / m2 / month. This price in Ba Ria-Vung Tau, Binh Duong, Long An ranges from 3.7-4 USD / m2 / month.
The price of industrial land also increases, in Ho Chi Minh City, it is close to 160 USD / m2 / rental cycle and other localities from 80-120 USD / m2 / rental cycle. The supply of industrial land tends to shift to tier 2 industrial cities and provinces thanks to competitive rents and low occupancy rates. New areas with good connectivity to the seaport will have fast occupancy rates.
Real estate investment trends in neighboring provinces take the throne
As the clean land fund in big cities like Hanoi and Ho Chi Minh City is increasingly scarce, real estate businesses will continue to shift to other provinces and cities that have advantages in developing mineral and industrial economy, especially tourism development. In addition, many developers tend to choose local provinces to build new urban areas because of favorable land procedures and shorter investment cycle of projects than urban projects.
According to experts, this trend will take the throne within the next few years. The fact that businesses simultaneously develop projects to suburban areas such as Binh Phuoc, Long An, Binh Duong, Dong Nai, Ba Ria – Vung Tau, Binh Thuan is the optimal solution of both investors and investors.
According to the evaluation of Mr. Vo Huynh Tuan Kiet, Deputy Director of CBRE Vietnam, with the scarcity of land available at the center, project developers will of course have to find land on the edge of Ho Chi Minh City. And this trend is increasingly clear and strong. The neighboring provinces will also be the main markets providing the main source for the real estate market in the coming years.
However, according to experts, the “great migration” to the province needs a synchronous planning strategy to create satellite towns, full utilities, not the “empty garden” scene.
Housing to meet real demand maintains growth momentum
The residential segment is still assessed as a stable growth in the coming period because of the long-term housing needs of the people. In particular, the mid-range price segment, suitable for the majority of customer finance tends to lead the market in the long term.
Ms. Trang Bui, JLL Vietnam Market Manager said that currently the apartment segment to meet the needs of real housing is still good in the market. 80% of the market supply is mid-end product lines, most of which are for real residential demand.
Within 5-7 years later, the number of middle-class customers will increase in Vietnam market, whereby at this time investors target the middle segment or a slightly higher segment, after 5-7 years of income As real people increase, they will need to find better and higher-class houses to improve their housing. According to Ms. Trang, with the finished products, serving the demand for real accommodation is always sought by both investors and buyers.
Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HoREA) also said that in the coming years, the trend of affordable and affordable apartments will be crowned and still occupy a large proportion in the market. According to Mr. Chau, in order for the real estate market to develop sustainably and balance, the affordable and affordable apartment segment accounts for the largest proportion. While the current supply is very limited, next year will certainly still be very much waiting for consumers. Especially, the proportion of middle-income and low-income people and workers in big urban areas has great demand for housing. Affordable apartments not only have great demand, but also have high liquidity, much higher than other segments.
Investors still prefer land plots
According to forecasts of most experts, although the ground has cooled down compared to the previous time, this is still the preferred type of investors.
In the coming period, the land area is forecasted to continue to be scarce because there are not many newly launched projects, so its attraction is still quite strong for investors with good capital inflows.
According to the Vietnam Association of Real Estate Brokers, in the coming time, the market will have refinements, adjustments and investors’ cash flows will also be carefully calculated and allocated more appropriately. Looking back on the investment channels in the current context, the land is still the first choice of investors in the newly developed local market, especially the small-value land plots, which are suitable for the financial level. Moderate will be a safe solution to help the cash flow keep the best price.