MANY “GIANTS” RACING TO JOIN THE INDUSTRIAL REAL ESTATE MARKET

“The US-China trade war and the Covid-19 epidemic strongly impacted FDI inflows. Japan has earmarked $ 2.2 billion in its record-high economic bailout to help Japanese manufacturers move their chains out of China in the context of the epidemic disrupting supply chains between big trade partners. This is a very good opportunity for Vietnamese businesses to cooperate and receive investment flows from leading international companies.

Not only that, Vietnam has always been an attractive destination for foreign businesses with a younger and more mobile workforce than other countries in Southeast Asia, plus, labor costs are quite low.

In addition, the infrastructure - seaports, road transport systems, waterways, warehousing systems - is relatively good, the political situation is stable and the fastest economic growth rate in the world is also plus points for Vietnam.

Another advantage of Vietnam is that it is close to China in terms of geography - making it easy for investors to add production facilities - but it still doesn't need to give up this 1.4 billion-market.

In addition, according to research of IIP VIETNAM, foreign enterprises moving production facilities to Vietnam will have more opportunities to invest in finance, tourism, real estate and services, while in Thailand, Indonesia. or Hong Kong, investment opportunities are more and more limited.

The "giants" joins industrial real estate. (real estate market)

Catching this trend, a series of giant companies have planned to focus resources on industrial real estate.

For example, recently, DRH Holdings Joint Stock Company (code DRH) has just submitted to shareholders a development plan for 2020, considering investing in industrial real estate to catch the wave of investment shift.

Or, Tan Thanh Long An Investment Joint Stock Company and Vietnam Creative Industrial Park Management Joint Stock Company (VNIP) organized the commencement of Viet Phat Industrial and Urban Zone with acreage of the Zone is more than 1,800 hectares that is one of the largest industrial parks now. Viet Phat Industrial and Urban Zone is located in Tan Long Commune, Thu Thua District, Long An Province.

Notably, in the total area of 1,800 hectares of project land, the investor spends 1,200 hectares for the industrial zone, only 625 hectares for the urban area. This event officially marks an important milestone marking the real estate businesses racing to pour capital into the segment of industrial real estate after a long time that this segment has not been paid due attention to its potential.

Previously, at the end of March, preparing for exploiting the field of industrial real estate, Vinhomes Joint Stock Company announced information about receiving shares transfer in Vinhomes Industrial Zone Investment Joint Stock Company (abbreviated VHIZ), thereby becoming the parent company of this business. Thus, with this decision, Vingroup officially encroached into the field of industrial real estate (via its subsidiary Vinhomes).

However, it can be seen that Vingroup had carefully prepared for this before, when the name of Vingroup Ventures was changed to Vinhomes Industrial Zone Investment Joint Stock Company. With this name change, Vingroup - JSC officially set its ambition to encroach into a new business field - industrial real estate.

In fact, Vingroup's desire to participate in the industrial real estate sector was revealed in a presentation to investors on its business results in 2019. Accordingly, this field is expected to become New growth engines for Vietnam's number one real estate developer from 2020.(real estate market)

In a similar situation, at the end of March, Hoa Phat Construction and Urban Development Joint Stock Company (a member of Hoa Phat Group) with its experience, was faster than other businesses, has been racing "into the field of industrial real estate, when sending a document to the People's Committee of Hung Yen province for approval of the policy of researching, surveying, planning and implementing investment projects of Bai Say Industrial Zone in the communes of: Bai Say , Phu Ung, Bac Son (An Thi district, Hung Yen).

Received this proposal, the People's Committee of Hung Yen province assigned the Department of Planning and Investment to preside over and coordinate with the provincial Management Boards of Industrial Zones and related agencies, appraise the proposal of Hoa Phat Construction and Urban Development Joint Stock Company.

According to Professor. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, developing real estate combined with industrial parks is a great opportunity because not only industrial zone investors are interested in industrial parks but also pulling housing-sector-investors. At the same time, it also entices investors of other services to join.

However, in order to attract investors, enterprises operating in industrial parks not only need to have land and infrastructure of industrial parks, but also need to become fully qualified and professional service providers and target to a accurate group of customers. In addition, despite the good foundation, the demand is very large, but not all industrial parks will have positive performance, if the investors of industrial parks and local authorities do not proactively take measures to attract tenants.

Besides, there should be a plan to directly or support the construction of labor unions showing the interest of the Party and the State in order to improve the living conditions of workers in industrial zone. That is a formula for gathering and developing union members of trade unions.(real estate market)

In addition, investors of industrial zones should pay attention to building housing quarters for workers with full social facilities such as schools, clinics, supermarkets, wedding restaurants, entertainment and dining areas, bank, post office ... to contribute to the realization of the dream of a home, a place of residence for workers.