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Industrial real estate faces the challenge of slowing down FDI inflows into Vietnam

Large corporations are being more cautious and considering continuing to invest in the context of being affected by fluctuations in the global economy and politics. This is not good news for Vietnam's industrial real estate market.

According to statistics of the Ministry of Planning and Investment, the whole country currently has about 563 industrial parks (IZs) in the planning in 61/63 provinces; 397 industrial zones have been established; 292 industrial zones have been put into operation with a total natural land area of ​​more than 87,100 ha, industrial land area of ​​more than 58,700 ha. In addition, there are 106 IPs under construction with an industrial land area of ​​about 23,800 ha.

Data from the Vietnam Association of Realtors (VARs) shows that, by the end of the first quarter of 2023, the occupancy rate of grade 1 industrial zones across the country continued to increase, reaching over 80%. Leading the way is the South with an average occupancy rate of 85%. Which, Binh Duong is the locality with the highest occupancy rate, reaching over 95%.

In general, the occupancy rate of industrial parks in the key markets of the North and the South will remain at over 90% in 2022. Some industrial parks in Hanoi, Ho Chi Minh City, Dong Nai, Bac Ninh, North Giang, and Binh Duong are almost completely filled.

As a rare bright spot of the real estate market in recent times, industrial real estate has a lot of room and development opportunities in the short, medium, and long term.

However, according to VARs experts, this segment also has many obstacles, the site clearance is still slow, creating bottlenecks in many projects, and industrial zones still lack services to serve the lives of workers. family, the connection infrastructure is not synchronized, the technical standards of the factory are still low,...labor and their families, the connection infrastructure is not synchronized, the technical standards of the factory are still low,...

In addition, in the context of the gloomy situation of the global economy, import and export decline, foreign investors are becoming cautious and want to learn more carefully before making decisions. According to VARs experts, the deceleration of FDI, although not much, still has a significant impact on the growth rate of industrial real estate. decline, foreign investors are becoming cautious and want to learn more before making decisions. According to VARs experts, the deceleration of, although not much, still has a significant impact on the growth rate of industrial real estate.FDI import

The latest report of the Foreign Investment Agency (Ministry of Planning and Investment) shows that, as of May 20, 2023, the total registered foreign investment capital in Vietnam reached nearly 10.86 billion USD, only by 92.7% over the same period. Regarding capital structure, there are 962 new projects granted investment registration certificates, with a total registered capital of more than 5.26 billion USD. Besides, 485 times of projects were registered to adjust investment capital, up 22.8% in a number of projects but down 59.4% in capital over the same period.

According to this agency, the growth rate of the number of new projects is greater than the growth rate of total investment capital, showing that small and medium-sized foreign investors continue to care and believe in Vietnam's investment environment. recently made new investment decisions.

Large corporations are now carefully considering continuing to make large investments in Vietnam in the context of the impact of the global minimum tax policy.

Commenting on this issue, Mr. Thomas Rooney, Senior Manager of the Industrial Services Division, Savills Hanoi said that after activities were restored after the COVID-19 pandemic, investors or businesses come to Vietnam to survey the market, but they are somewhat cautious and want to learn the market more carefully before making a decision.

In addition, in 2023, FDI inflows will be further affected by the global minimum tax policy. This leads to a less active market situation. Large corporations have also become cautious, considering continuing to invest in the context of global economic and political impacts.

However, according to this position, this is only a matter of time, businesses need more time to consider and decide. Still, the fundamental factors of Vietnam's economy, demographics, and labor resources are still highly appreciated. This is also the main attraction to convince investors to the market.

On the other hand, although adjusted investment capital still decreased over the same period; However, the number of projects with capital adjustment still increased. This has partly confirmed investors' confidence in the Vietnamese market and continued to make decisions to expand existing projects.

"In general, the market still recorded positive signals, Vietnam is always on the list of emerging markets to attract investment in the region," said Mr. Thomas Rooney.

In the face of global geopolitical and economic fluctuations, investment is always a factor that many businesses care about. However, the Vietnamese market still recorded a number of large investment deals, especially in industrial production such as Samsung, LG, and Foxconn,...

In April, Quanta Computer Corporation - Apple's partner signed an agreement with the People's Committee of Nam Dinh province to develop a computer manufacturing project in My Thuan industrial park. This is the 9th factory in the world of Quanta Computer with an estimated investment capital of 120 million USD. The Boltun Vietnam project by two Taiwanese investors Boltun Corporation and QST International Corporation has also received an investment certificate worth 165 million USD in Bac Tien Phong Industrial Park.

In addition, at a recent meeting with Nam Dinh province, Ms. Ngo Le Hoa, Chairman of the Board of Directors of JiaWei Group of Taiwan (China) said, after carefully studying the investment environment of Nam Dinh province, Mr. Group and ancillary businesses of the Group have decided to invest in My Thuan Industrial Park with a total estimated capital of about 100 million USD on an area of ​​​​nearly 15 hectares with a group of 3 projects.

What does Vietnam need to do to attract big investors?

According to VARs, the change in the economy, and the emergence of new needs from development require clear and strong policy directions to support investors and promote the market to develop commensurately. with available potential.

Specifically, synchronous industrial zone planning information needs to be public and transparent in the overall planning map of the region and locality so that investors can rest assured to research and seize investment opportunities.

Second, infrastructure needs to be promoted, focusing on investment because this is the most important factor affecting real estate growth potential as well as increasing competitiveness. Especially the transport infrastructure connection.

The third is to simplify licensing procedures and solve land procedures (compensation, site clearance) that prolong construction time as well as legal costs. Localities need to implement the "carpet" campaign to welcome investors and strengthen investment incentive policies and other legal support services. Priority will be given to industrial zones in line with orientations, achieving targets to limit emissions, energy consumption, etc., to limit impacts on the environment, and to reduce pressure on infrastructure.

In addition, the data of VARs shows that "rich and rich" businesses from developed markets have very high requirements for the ecosystem around the IP and factors related to technical infrastructure. , manufacture factory.

This demand requires that industrial zones not only need to have areas for production activities, housing for workers, development of diverse accompanying services, and creating a living environment for workers and their families, but It is also necessary to develop modern factories, capable of providing international quality services at competitive prices.

(Theo Doanh Nghiep & Kinh Doanh)


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