Haiphong – city of heated industrial property

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Linh Pham 15:10, 2019/04/21

Located on the main economic corridor, Haiphong is set to become the main gateway for import and export in Vietnam`s northern region.

Haiphong, the northern coastal city receiving shipment from many parts of the world, has appeared to be one of the most buzzling economic hubs in Vietnam’s northern region and so is its industrial real estate segment, JLL has predicted.

An overview of Haiphong. Photo: Haiphong.gov.vn

Position fuels economic growth

Being one of five major cities in Vietnam with direct connection to Hanoi and located on the main economic corridor, along the north-eastern coastal area, Haiphong is set to become the main gateway for import and export in the northern region, according to Country Head of JLL Vietnam Stephen Wyatt.

Given its proximity to China, being only 200 km from the border, the city is widely regarded as the China-plus-1 manufacturing base in ASEAN to take advantage of the China-ASEAN free trade agreement.

Thanks to investment incentives and favorable conditions supported from the central authority, Haiphong has been the spotlight for foreign direct investment (FDI), Stephen Wyatt said.

Haiphong's GDP over the past years. Photo: JLL

Haiphong's GDP in recent years. Photo: JLL

Indeed, Haiphong ranked third nationwide for FDI attraction in the 2016-2018 period, behind Ho Chi Minh City and Hanoi, according to statistics by the Ministry of Planning and Investment’s Foreign Investment Agency.

Accordingly, Haiphong, with gross regional domestic product (GRDP) growing more than 15% annually, was the fastest growing locality for the past three years in comparison with four other ones namely Ho Chi Minh City, Hanoi, Danang, and Can Tho.

The city, which is home to nearly 2 million inhabitants (the third largest city behind HCM City and Hanoi) with an additional 12%-15% middle-class population annually, has underpinned its exceptional growth over the past five years.

Notably, the local government has shown its commitment to continue Haiphong’s exponential growth by offering numerous special tax incentives, paving the way for it to become a foreign investment magnet.

Haiphong's FDI over the past years. Photo: JLL

Advantages – industries and logistics

Over the past years, Haiphong, with rapid urbanization, had established itself as a core industrial hub in Vietnam, Stephen Wyatt emphasized.

Benefiting from the positive effect of the China – ASEAN FTA, and the official development assistance (ODA) from Japan, Haiphong is the preferred destination for manufacturing giants in high-tech industries.

Along with numerous incentives available to interested investors, Haiphong, together with Bac Ninh, is transforming the industrial landscape across the Northern region.

The constant improvement of Haiphong’s Provincial Competitiveness Index (PCI) rating demonstrates the authorities continued efforts to enhance the business environment, which will further bolster the attractiveness of Haiphong.

Haiphong, through the Haiphong Economic Zone, offers companies preferential treatment when they set up operations, is also acting as a catalyst to tempt more investors to the region.

Haiphong's industries and logistics landscape. Photo: JLL

With total area of industrial and logistics zones of 4,701ha, Haiphong is home to 11 existing industrial parks, including Dinh Vu-Cat Hai Economic Zone, and six future industrial parks. The average rent is around US$92/square meter/lease term (several years depending on each zone).

Recognizing that infrastructure is a crucial element to leverage economic development, the local authorities have mobilized its resources to develop modern and synchronous transportation infrastructure, which will improve connections to key surrounding regions.

This enables Haiphong to become the main maritime trade gateway of the economic corridor in the northern region.

The city’s infrastructure has undergone significant improvements through the completion of three core projects of Hanoi – Haiphong Expressway, Tan Vu – Lach Huyen Highway, and Dinh Vu – Cat Hai Bridge.

Haiphong in connection with other parts of the world. Photo: JLL

By facilitating the linkage to the Hanoi – Lao Cai Express Way, these projects will reportedly help reduce the commuting time between the northern province of Lao Cai and Hai Phong International Gateway Port (HIGP) to approximately six hours.

Unlocking Haiphong potential

Given advantages of a port city, Haiphong should continue investing in infrastructure to drive its economic activities and serve as a crucial connection between sea and land transport, Stephen Wyatt recommended.

With strategic location that connects to China, it becomes a logistics hub for the northern region of Vietnam and the southeast of China.

In addition, through economic zones, the city will create more favorable business environment, create more liveable city to entice stronger workforce and embrace Industry 4.0 for the efficiency of good shipment, according to JLL country director.

Haiphong's per capita income over the past years. Photo: JLL

JLL concluded that Haiphong has all the necessary ingredients to develop into a true global port city with continued investment in new roads, traffic management system, rail and inland waterways, and in labor productivity.

The city will totally tap its potential for many years to come with more efficient customs and administration procedures, with development of supporting industries, and with innovation and technology, affirmed JLL.

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