HCM CITY – Demand for industrial land around the country is expected to increase thanks to significant growth in terms of both industrial production and FDI.

Last year the city’s index of industrial production grew by 7.9 per cent while Hà Nội’s expanded by 7.1 per cent.

FDI flows into HCM City topped $6.3 billion while for Hà Nội they were worth $2.4 billion, a national year-on-year increase of 22.5 per cent, and most foreign and domestic investors are seeking to expand production.

At HCM City IPs, according to real estate service consultant Colliers International, at the end of 2017 the average annual rent was $142.2 per square metre, an increase of 0.9 per cent from the previous year.

HCM City now has 20 operating IPs with a total area of 3,025 hectares. Củ Chi District has the largest number of industrial parks totally measuring 863 hectares, but the price is lowest there at $80 -90 per square metre.

By 2025 it is expected that more 2,300ha in eight new industrial parks will come into the market with a promise of better infrastructure and services.

From now through 2025 rents are expected to increase sharply.

Authorities around the country continue to offer incentives to promote supporting industries.

The HCM City science and technology department has set up a database for all enterprises in supporting industries, including foreign companies, for easy connection and technology transfer.

Around 200 hectares in the Hiệp Phước and Lê Minh Xuân 3 Industrial Parks will be earmarked for supporting industries.

Hà Nội has 11 industrial parks with 2,700 hectares, mostly in outlying districts.

Rents in Hà Nội’s IPs increased more than in HCM City in 2017 with an occupation rate of 82.6 per cent, 5.3 percentage points higher than the year before.

By 2020 Hà Nội will have 14 more IPs with 6,100 hectares in operation.

“With a business-friendly environment and high demand from customers, we hope the trend will continue through 2018,” David Jackson, general director of Colliers International Việt Nam, told the Thời báo Kinh tế Việt Nam (Việt Nam Economic Times) newspaper.

“Hà Nội is a good location close to northern industrial centres like Hải Phòng, Hưng Yên and Bắc Ninh, and this helps the city be the best location for IPs.”

In other cities too, demand for industrial land has increased as many enterprises have expanded their production since the beginning of this year.

For instance, HTMP Ltd signed a contract with TNI Holdings Việt Nam to expand its production at the Quang Minh Industrial Park, Japanese automobile parts maker Toyoda Gosei started construction of a new plant in Tiền Hải Viglacera Industrial Park in the northern province of Thái Bình.

Industrial production has recovered and is expected to expand, and the occupancy ratio at industrial parks has significantly increased, especially this year. — VNS