HO CHI MINH CITY: Rental rates for industrial land in Vietnam are forecast to slightly increase in the coming time, experts say.

According to property consultants CBRE, the surge in the next three years will be 3% to 9% per year in the north and 3% to 7% per year in the south.

Meanwhile, the company said, the asking rent of ready-built factories and warehouses is predicted to slightly increase by 1% to 4% per year in the next three years.

The company attributed price increases to the wider cooperation between Vietnam and other economies.

As Vietnam has enhanced its diplomatic relations with major economies recently, it is expected that the country’s economy in general, and its manufacturing and industrial real estate sectors in particular, will benefit and continue to develop, the company said.

An Nguyen, senior director, head of CBRE Vietnam in Hanoi, said: “To maintain its position as a destination for foreign investment, Vietnam needs to continue focusing on improving infrastructure, including road connectivity, the power grid, and industrial zones. It also needs to enhance the quality of its workforce and adjust relevant incentive policies accordingly.”

Vietnam’s industrial real estate market maintained positive activity during the first quarter of 2024.

Manufacturing activity also showed promising signs in the first three months of the year, with exports and imports registering growth rates of 17% and 13.9% year-on-year, respectively.

The processed and manufactured industrial goods sector accounted for 88.1% of total export turnover.

For the industrial-land market, industrial-land rental rates in tier one markets of the northern region experienced a slight increase of 1.2% quarter-on-quarter and 7.8% year-on-year, averaging US$133 per sq m.

Meanwhile, industrial land rental rates in tier one markets of the southern region remained stable at US$189 per sq m, showing year-on-year growth of 2.4%.

Due to the absence of new industrial parks entering operation during the quarter and the continuous attraction of new tenants to existing industrial parks in tier one markets of the northern region, the occupancy rate increased by 1.3 percentage point to 83%.

The absorption area during the quarter reached nearly 110ha, with notable transactions such as the 10ha Victory Giant Technology factory in Bac Ninh Province.

However, in the southern market, due to relatively limited industrial land availability, the occupancy rate remained stable at 92% with an absorption area of just over 20ha.

 - ANN