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VietNamNews

Industrial park properties show expansion potential

Update: December, 19/2015 - 09:53

In the near future, the housing segment for workers in the IPs would attract large foreign investments due to the high demand. Property experts said enterprises should get the opportunity to invest in the potential segment. — File Photo

HA NOI (VNS)— The property market in industrial parks (IPs) shows great potential for development with enterprises looking to invest for better production and business opportunities once free trade agreements come into effect.

According to a report of VinaCapital on the domestic property market, there was total foreign direct investment of about US$7 billion in the industrial parks in the first ten months of this year, reported Kinh te do thi newspaper.

In the near future, the housing segment for workers in the IPs would attract large foreign investments due to the high demand. Property experts said enterprises should get the opportunity to invest in the potential segment.

If the Trans Pacific Partnership (TPP) agreement comes into effect, between 2.5 million and 3 million people from the rural areas of Viet Nam would come to cities for jobs, resulting in demand for housing in the IPs.

Economic expert Nguyen Minh Phong said real estate enterprises could invest in building medium-priced homes for lease or houses for workers with low incomes. Meanwhile, they could develop luxury homes and apartments or villas for local and foreign experts working at IPs. There would be a great demand in the market, so there was tremendous potential in it for property investors from 2016 to 2018.

However, investors should invent specific strategies for experts and workers because the experts need accommodation with convenient services such as supermarket, hospital and schools, while the workers have simple demands on housing such as quality and cheap prices.

Do Thu Hang, head of research and consultancy at Savills Viet Nam's Ha Noi branch, said property in industrial zones would directly benefit from the TPP. Foreign companies of TPP countries would increase investment in Viet Nam and move their production work here to benefit from the advantages in production and business from the TPP commitments. Therefore, the demand on housing in industrial zones had really great potential.

The TPP will spur more investments into Viet Nam, especially from countries that are big importers of Vietnamese products like the United States (US) and Japan, CBRE Viet Nam, a foreign property service provider said.

The US investment in Viet Nam remains modest compared to South Korea and Japan. American companies will increase manufacturing activities in Viet Nam and reimport Made-in-Vietnam products thanks to the country's tax exemption on major products such as garments and textiles.

They will likely target industrial land in the Southern provinces of Viet Nam, where a number of existing garment and textile factories are located. Similarly, manufacturers from other countries will certainly consider switching to Viet Nam from non-TPP countries such as China, Thailand, Cambodia, and Indonesia, in addition to India, to enjoy extra-low tariffs.

This will lead to more demand for industrial land, warehouses and factories, not necessarily from the TPP countries but also from the non-TPP investors like mainland China, Hong Kong or Taiwan. — VNS

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