Industrial real estate benefits from M&A and new supply

Vinh Phuc, Bac Ninh, Long An, Nghe An have many newly approved industrial parks. Photo: Internet

Many M&A deals in industrial real estate

The performance of the industrial sector in the first five months of 2021 still recorded improvements, although social distancing and domestic travel restrictions have made it difficult for investors who want to rent industrial land.

As of May 20, 2021, Vietnam has attracted a total registered FDI of US$13.9 billion. The manufacturing and processing industry attracted US$6.1 billion (accounting for 43% of total capital), there were 215 new projects with a total registered capital of US$2.57 billion and 222 existing projects registered an increase of US$3.1 billion in capital.

The largest industrial production projects in May 2021 came from groups of businesses from Hong Kong and Singapore in Quang Ninh and Bac Giang.

The representative of Savills said that the growth momentum of industrial real estate benefits positively from M&A deals and the new supply of industrial real estate.

Regarding M&A activities, the market has witnessed new deals in 2021. Typical deals include Boustead Projects acquiring a 49% stake in KTG Bac Ninh Industrial Development Joint Stock Company (in Yen Phong industry park) for about US$6.9 million.

ESR Cayman Limited and BW Industrial Development Joint Stock Company (BW) cooperate to establish a new joint venture to own and jointly developing 240,000 m2 in My Phuoc 4 Industrial Park near Ho Chi Minh City.

The Vietnam Real Estate Brokers Association also said that in the first quarter of 2021, Vietnam will continue to be an attractive destination for international investors and manufacturers. Therefore, the development prospects of industrial parks in Vietnam remains good.

Currently, most of the provinces and cities that are capable of industrial development have a very active phenomenon of proposing to develop new industrial parks.

Dozens of approved projects

Regarding new supply, as of the first quarter of 2021, statistics from the Ministry of Planning and Investment show that there are 370 industrial parks established in the whole country with a total land area of ​​about 115,200 hectares. These industrial parks are estimated to have provided about 3.6 million new jobs in both the North and the South.

In the first quarter of 2021, dozens of industrial projects in 13 provinces and cities were approved, promising to provide thousands of hectares of new industrial area.

For instance, Bac Ninh is the province with the largest number of future projects with five new industrial parks. In Vinh Phuc, industrial park projects such as Song Lo, Tam Duong 1, and Thai Hoa - Lien Son - Lien Hoa (total area 500 hectares) will also be introduced. Many new projects are expected to be implemented soon in the provinces of Hai Duong, Nam Dinh, Nghe An, Quang Nam.

Dong Nai has also announced plans to build three new industrial parks with a total area of 6,475 hectares and Long An is expected to have a new US$59 million industrial project in Duc Hoa district.

Previously, forecasting the industrial real estate market in the second quarter of 2021, the Vietnam Association of Realtors said that the domestic demand for industrial real estate would continue to increase. Many new industrial parks will continue to join the Vietnamese real estate market and many new projects to develop industrial park infrastructure will be approved.

Along with that, many logistics projects serving industrial parks will also be promoted and the rental price of warehouses and factories will continue to be stable.