Many factors support industrial real estate market’s growth: Experts

The industrial real estate market is expected to boom thanks to good signs in foreign direct investment (FDI) and the resumption of international flights, predicted experts from Savills Vietnam.

According to the Foreign Investment Agency under the Ministry of Planning and Investment, in the first two months of 2022, Vietnam drew US$5 billion in FDI, equal to 91.5% of the same period last year, but the figure is still encouraging given the spreading pandemic. Meanwhile, US$2.68 billion worth of FDI was disbursed in the period, up 7.2% year on year.

The real estate sector came second in FDI attraction in the period with US$1.52 billion, the agency reported.
Savills Hanoi Director Matthew Powell commented that compared to regional countries, Vietnam has more favourable conditions with more affordable real estate prices and many new projects that will increase supply in the future.

Competitive labour cost and the improved legal corridor are also among factors attracting investors to the country, he said.

Powell highlighted that many famous brands’ selection of Vietnam as their strategic destination has helped promoted FDI attraction and enhance the country’s prestige in the world arena.

He listed reasons making the industrial real estate in Vietnam attractive, including prices, large number of prestigious developers, labour resources, convenient transport network, easy access to international seaports and airports, and incentives from the State.

Besides, political stability, abundant investment opportunities and support from the local government, as well as the country’s administrative reform efforts are also other factors luring investors to Vietnam instead of China, India or Thailand, according to Powell.

Savills experts forecast that the resumption of international flights from March 15 will lead to a boom in FDI attraction with many new projects, especially factories, logistics services and warehouses.

The industrial real estate market has seen the emergence of many data centre and logistics projects with high-quality investment, contributing to the promotion of Vietnam's reputation in the international arena. The resumption of international routes will make it easier for foreign-invested enterprises to access industrial park projects in Vietnam, which will greatly support the growth of this segment in 2022, they added.