An industrial park in the northern province of Bắc Ninh. VNA/VNS Photo Danh Lam

HÀ NỘI — Foreign direct investment (FDI) continued to flow into Việt Nam's industrial property market, accounting for 19 per cent of total FDI or US$3.5 billion during the first nine months of the year, doubling the figure recorded during the same period last year. 

Industrial properties will likely see the most growth, according to Savills Việt Nam. Strong economic indicators in recent years have sent foreign investment soaring, especially in the northern and southern economic hubs. 

Savills Việt Nam, one of the country's leading property agencies, cited the country's early reopening, multiple free trade agreements (FTA), stable exchange rates in comparison with neighbouring countries, strong export economy, tax cuts and support policies for workers as major encouragements for foreign investors. 

Matthew Powell, director of Savills Hà Nội, the agency's northern headquarters, said Việt Nam, in particular its industrial property market, was in a good position to attract additional FDI with a majority of its industrial hubs at full capacity and more projects underway. 

In a report released by the agency in September, industrial property supply remained stable with demand soaring, especially in Hà Nội and HCM City. Improved infrastructure and enlarged land allocation have resulted in increased ability to compete but not without a surge in prices. 

On average, rental for industrial property in Hà Nội has reached $140 per square metre (sqm), HCM City $200 per sqm. Prices tend to be slightly lower in the two industrial hubs' neighbouring provinces and could be strong alternatives as provincial authorities have distributed more land to industrial projects. 

Strong contenders for FDI included Bắc Ninh, Hải Phòng, Hưng Yên and Hải Dương in the north, Bình Dương, Bà Rịa-Vũng Tàu and Long An in the south. 

During the second quarter of 2022, nine industrial projects worth a total of VNĐ29.4 trillion ($1.23 billion) with a land area of 2,472 hectares have been given the green light, which have been projected to go into operation during 2023-25. 

Powell said rising prices and full capacity in major industrial hubs reflected strong demand in the market, setting the conditions for investors to introduce new products and regulators to improve industry standards. VNS