Growing M&A deals and new supplies would serve as a major boost for Vietnam’s industrial property market, said John Campbell, Savills Vietnam Industrial Services Manager.

Phu Nghia Industrial Park in Hanoi. Photo: Kinhtedothi

Despite the serious Covid-19 situation in a number of provinces/cities, the emergence of new industrial parks along with key industrial projects being put into operation shows the market has not been affected by the pandemic, noted Campbell.

Campbell also referred to major M&A deals in 2021, including Boustead Projects’ acquisition of a 49% stake worth US$6.9 million from KTG Bac Ninh Industrial Company at Yen Phong Industrial Park.

ESR Cayman Limited – Asia’s largest logistics real estate platform and locally-based BW Industrial Development announced the establishment of a joint-venture to manage 240,000 square meters at My Phuoc 4 Industrial Park, near HCMC.

The move marked ESR Cayman Limited’s entry into Vietnam’s market, in turn expanding the ESR Cayman’s presence in Southeast Asia.

Meanwhile, new projects set to become operational soon are seen as positive signs of a booming market, with notable names being the Logos Property covering an area of 81,000 square meters at VSIP Bac Ninh 1 Industrial Park, scheduled to operate in the fourth quarter of this year.

KCN Vietnam Industrial company, the latest name joining the local industrial property market, made its first move by purchasing a land plot of 250 hectares worth US$300 million. The company targets to expand its presence in major cities, including Bac Giang, Haiphong, Hai Duong, Dong Nai, and Long An.

Data from the Ministry of Planning and Investment revealed as of the first quarter of 2021, Vietnam is home to 370 industrial parks with a total area of 115,200 hectares that have created jobs for 3.6 million people, in which 328 are located outside of economic zones, 34 within coastal economic zones, and eight in border-gate economic zones.

In the first quarter, dozens of new industrial projects in 13 provinces/cities have been approved that would provide thousands of hectares of industrial spaces to meet growing investment demand in the coming years.

In Bac Ninh province, five new industrial parks are set to become ready for operation, including Que Vo III Industrial park with an expansion of 208.54 hectares worth US$120.87 million, and Gia Binh II for US$172.17 million in an area of 208.54 hectares.

Investors have also committed to investing in new projects in the provinces of Quang Tri, Vinh Phuc, Dong Nai, and Long An.

According to Savills Vietnam, more M&A deals in the local industrial property market are expected to materialize, with the largest deal in May belonged to investors from Hong Kong (China) and Singapore in Quang Ninh and Bac Giang province.

“Efforts from the government and enterprises in fighting the pandemic and maintaining operation are expected to help industrial production grow strong in the future,” noted Savills Vietnam.