INVESTMENT IN INDUSTRIAL REAL ESTATE: INVEST MASSIVELY, WATCH OUT THE DANGER OF HAVING TO RESCUE!

Seizing the situation of relocating factories from China, Vietnamese investors quickly jumped into the industrial real estate market. This can be very risky if not carefully consider.

Benefiting from industrial real estate, agility has the opportunity

When multinational corporations stepped up the process of diversifying their investment locations and relocating their production facilities after the Covid pandemic - 19, Vietnam was assessed as the country with the largest opportunities to become new production center of the world.

In this context, Vietnam's industrial real estate market becomes vibrant. The report of many real estate organizations published shows that from the beginning of 2020 to the present, there is continuous increase of land and factory leasing requirements from both existing and new tenants

Many issues need to be solved to take opportunities from industrial real estate

However, many experts have also given a warning if massively "jumping in" will meet many consequences, not careful may bring the danger of having to "rescue".

It takes 2-3 years, if fast, to do procedures for an industrial project, even in many years, the legal procedures are still not complete. If the investment is carried out now, after a few years of completion of the procedure, there is a risk of falling into saturated time, even an excess of supply, therefore there is the risk of having to rescue the industrial park land.

In the North, the offer rental fee is from 65 to 260 USD / m2 /a rental period. In the southern industrial areas, the offer rental fee is about 80 - 300 USD / m2 / a rental period. Besides industrial land for lease, the market also recorded a good growth in the segment of factories and ready-built warehouses. Supply of ready-built factories continued to grow steadily in both major industrial areas in the South and the North. But if foreign investors continue to increase, they will begin to consider more carefully about investment decisions in Vietnam.

Thus, the increase in the supply of industrial real estate without attracting FDI, the "dull" state of industrial land will be the next problem to be solved.