Land price in industrial zones in Hanoi is lower than that in Ho Chi Minh city

According to the latest research on the industrial zone market in Hanoi and Ho Chi Minh City. Ho Chi Minh City announced by the Cushman & Wakefield Real Estate Services Company(C & W) Vietnam, the occupancy rates and industrial zone rental rates in these two cities have considerable variations.

Average land rental of industrial zones in Ho Chi Minh City  is higher than that in Hanoi

In Hanoi, total supply in Quarter II/ 2016 decreased 2% down to about 1,390 ha due to the IZ conversion of Hanoi - Dai Tu in Long Bien District into an urban area since it is not much effective in attracting tenants.

According to C & W, the overall performance of the market is relatively stable, with occupancy rate is still stable at over 72% quarterly. 6 of 10 industrial parks have been completely filled. Significant improvement has been noted in Noi Bai Industrial Zone Stage II and Phu Nghia Industrial Park with an absorption rate of about 3 ha/IP.

Average rental in the second quarter of 2016 decreased by 1% quarterly on quarter but increased by 2% at the same time, recorded at 2,451,000 VND/ m2 / lease term. Rental in Hanoi is still the highest in the North, 50% higher than that in Hai Phong and Bac Ninh.

On the new supply source, it is expected that nearly 2,360 hectares of nine industrial zone projects will enter the market from now to 2020, equivalent to 132% of current supply. From 2030 to 2050, Hanoi will have 33 industrial parks with a total area of ​​8,000 hectares.

Meanwhile, in Ho Chi Minh City, in the second quarter of 2016, a new industrial zone (Binh Chanh) was added, with over 300 hectares added to the market. Currently, the city has 19 operating industrial parks with total area of ​​3,940 ha. The area for lease is estimated at approximately 63% of the total land area, while the term for the remaining average land use right is 35 years.

About occupancy rate, it reaches to 65%, mainly due to low occupancy rate in new project; Meanwhile, the average rental increased by 2% quarterly and yearly, reaching to 2,858,000 VND/ sqm / lease term. This increase is mainly due to higher rental of new IPs. This rental is about two times higher than that of neighboring provinces like Binh Duong and Dong Nai.

Relating to increasing industrial land fund in HCMC.

By 2030, it is expected to reach about 2,600 hectares, coming from 10 new IZs, increase by about 66% compared to current supply. However, most of the future projects are still in the clearance and compensation phase; Construction progress is expected to last.

C & W experts said that with the TPP and other free trade agreements that Vietnam has participated in the recent time, together with stable economic conditions, Favorable policies and low labor costs, Vietnam will attract more investment from foreign manufacturers when they invest in Vietnam. Hence, with demand of industrial land increasing, this segment is still an attractive investment channel.

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