bongdaso v advantages that help to promote industrial real estate development are gradually becoming inferior to bongdaso v emerging challenges.
Specifically, industrial real-estate sector is predicted to be scarce new supply in 2023, stemming from bongdaso v following factors: Delay in approval procedures due to legal problems, Vietnam's competitiveness in attracting FDI investment is less optimistic than other countries in Southeast Asia (SEA).
According to a report from VNDirect on industrial real estate recently published, bongdaso v total land area of industrial parks in bongdaso v Southern of Vietnam increased to 41 950 hectares, equivalent to 9,2% over bongdaso v same period last year, bongdaso v proportion of warehouses for lease accounted for to 66,6%, equivalent to 27 950ha, an increment of 8,2%.
For Northern market, bongdaso v supply increased sharply, especially in bongdaso v fourth quarter of 2022 with an increase of 7,9%, equivalent to 590ha, bongdaso v total area increased to 11 923ha. For bongdaso v whole year of 2022, bongdaso v total area of bongdaso v industrial park real-estate reached 16 915 hectares, an increase of 8,1%. bongdaso v occupancy rate in this market decreased by 1 percentage point and 0,2 percentage point YoY down to 79%.
On bongdaso v other hand, according to research from VNDirect, bongdaso v increase in rent price brings benefits to both regions, bongdaso v South with 10,5% and bongdaso v North with 7,5%.
Accordingly, from bongdaso v first quarter of 2022, there were no further proposals for bongdaso v establishment of new industrial zones in both regions. In addition, bongdaso v number of new industrial parks included in bongdaso v national master plan for development of industrial parks is small.
bongdaso v reason for this situation is due to bongdaso v spread of industrial park development planning and bongdaso v approval decision by local authorities. In particular, bongdaso v change of leaders in many localities also slowed down bongdaso v project approval process. This leads to bongdaso v slow impact of site clearance, overlapping planning.
With bongdaso v southern market, there has been no new supply of industrial real estate since bongdaso v last 6 months of 2022 since bongdaso v strong increment in supply from bongdaso v beginning of bongdaso v year. This market will face difficulties when implementing new projects in 2023
According to a forecast from VNDirect, in bongdaso v period 2024 - 2027, bongdaso v supply of bongdaso v southern market is still limited when this region will have only 1 134ha of industrial real estate, 76% higher than bongdaso v previous report.
Due to later development, bongdaso v industrial real estate resource of bongdaso v Northern market is still abundant and at a reasonable price. Although more projects will be approved, bongdaso v supply shortage will last at least until bongdaso v end of 2023.
In bongdaso v period 2024 - 2026, bongdaso v northern market will have an additional 3 757ha of industrial real estate, mainly concentrated in bongdaso v provinces of Hai Phong, Vinh Phuc and Bac Ninh.
According to VNDirect, Vietnam's competitiveness to attract FDI is gradually weakening compared to other countries in SEA.
According to a report from bongdaso v Ministry of Planning and Investment, bongdaso v amount of processed FDI investment fund in February 2023 increased by 12,1%, reaching ,2 billion. In bongdaso v first two months of 2023, bongdaso v amount of processed FDI’s fund decreased by 4,9% over bongdaso v same period to ,6 billion. Additionally, registered FDI capital decreased by 51,4% compared to bongdaso v same period in February, so bongdaso v total registered FDI capital from bongdaso v beginning of bongdaso v year only reached 3.1 billion USD (Down 38% over bongdaso v same period).
This comes from factors in bongdaso v unstable landscape of bongdaso v global economy: inflation, slowing global growth, tightening financial liquidity from bongdaso v FED’s interest rate hike.
Compared to Indonesia, which has enacted bongdaso v Omnibus law to help to promote reforms to attract FDI from 2020 has achieved significant results: FDI inflows into bongdaso v country in 2021 have increased by 10% compared to last year, and by 2022, it has increased to 44%, reached to 45,6 billion USD.
Compared to other countries in bongdaso v region, Vietnam and Indonesia are bongdaso v countries that receive bongdaso v most FDI. However, bongdaso v orientation of bongdaso v two countries is different in which Indonesia is targeting bongdaso v electric vehicle supply chain, while Vietnam is aiming to become a center for electronic equipment production.
bongdaso v potential to attract capital for these two industries will continue to increase in bongdaso v coming years, but other countries in bongdaso v region have also actively grasped bongdaso v trend of attracting FDI for electric vehicle production, including battery production, encouraging consumers to switch to electric vehicles.
But Vietnam is currently lagging in this trend, which may lead to a decrease in FDI attraction.
According to VNDirect's assessment: We realize that bongdaso v development of electric vehicles and semiconductors will shape bongdaso v investment landscape in ASEAN. bongdaso v major changes in these two industries include attracting new types of investors, adding new segments in bongdaso v value chain, expanding capacity and participating more in regional production networks.”
Source: https://vietnamfinance.vn/bat-dong-san-cong-nghiep-2023-nhieu-thach-thuc-dan-xuat-hien-20180504224282801.htm
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