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Market brightens for industrial park developers

Update: February, 04/2012 - 09:26

HCM CITY — Things are looking up for the industrial park property market this year with many projects likely to be implemented with "multi-use" components, according to property service provider CB Richard Ellis (CBRE) Viet Nam.

Many developers believe IPs would be more successful with residential areas as well as industrial units, the company said in a summary of its quarterly report for HCM City.

Amata Industrial Park in the neighbouring province of Dong Nai can be an illustration of this predicted trend for 2012.

Huynh Ngoc Phien, Amata's general director, said investors in the IP (around 120, with almost half coming from Japan) will focus on their own business while others services were made available by the industrial park owner.

The industrial park is developing what he calls a "perfect city" project that includes residential and commercial facilities, schools, health care services and relaxation areas.

Another successful IP in Binh Duong Province, the Viet Nam – Singapore Industrial Park (VSIP), is also pursuing a similar policy, with commercial and residential projects underway.

"As interest in the industrial sector continues to increase, trends witnessed throughout 2011 strengthened in the fourth quarter," and were likely to persist in 2012, CBRE said.

It said there was continued interest in Viet Nam from manufacturers in Japan and Thailand. The natural disasters of last year have prompted tenants in these countries to seek opportunities to diversify risk.

Yet another trend likely to be seen in 2012 was an increase in pressure from authorities for factories within major cities to relocate to IPs, freeing land for infrastructure development and other uses, CBRE said.

It said last year's fourth quarter saw a slight drop from the third quarter in occupancy rates of IPs in HCM City, to 90.1 per cent, adding that this mainly resulted from an expansion of the Sai Gon Hi-tech Park that saw its occupancy rate fall by 20 per cent.

"The expansion, however, reflects continued confidence in the market as opposed to tenants leaving," the company said.

Meanwhile, land rates increased to US$194 per square meter per term (usually up to 50 years), up almost 42 per cent from the previous quarter.

In HCM City, this rise was mostly a reflection of movement at Tan Thuan Export and Processing Zone, where asking price almost doubled in the fourth quarter compared to the previous one.

Meanwhile, the rate for already built factories in the city's IPs did not change much, decreasing slightly to about $4.3 per square meter per term.

The CBRE survey of IPs in HCM City, Binh Duong, Dong Nai and Long An, which form the Southern Key Economic Region, found that the average land rate at major, stabilised IPs stood at $194 per square meter per term (usually up to 50 years) for HCM City, $56.57 for Binh Duong, $71.67 for Dong Nai and $73.33 for Long An — VNS

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