Connect With Authors
*Your message will be sent straight to the team/individual responsible for the article.
Menu
3360 km²
9.44 million
2511 km²
4.01 million
2.22 %
In recent years, Hanoi has experienced a notable transformation in its industrial real estate sector, reflecting the city’s economic growth and increased foreign direct investment (FDI). The demand for industrial spaces in and around Hanoi has surged, driven by factors such as the city’s strategic location, improving infrastructure, and a favorable business environment.
One prominent trend is the development of industrial parks and zones, providing purpose-built facilities for manufacturing, logistics, and other industrial activities. These areas often attract both domestic and international businesses seeking to establish or expand their operations. The government’s initiatives to streamline administrative procedures and create a more business-friendly environment have further fueled the growth of the industrial real estate sector.
Hanoi’s proximity to key transportation hubs, including highways, railways, and an international airport, enhances its appeal as a logistics and distribution center. This strategic location is particularly advantageous for companies engaged in cross-border trade. Additionally, the city’s position within the broader economic development plans of Vietnam has led to increased attention from investors looking to capitalize on the country’s industrialization and economic expansion.
Investors in Hanoi’s industrial real estate market are increasingly diversifying their portfolios to include eco-industrial parks and sustainable developments. This reflects a global trend towards environmentally conscious practices, with businesses seeking spaces that align with green and sustainable principles. As a result, developers are incorporating eco-friendly features into their projects, aiming to attract environmentally conscious tenants.
In conclusion, Hanoi’s industrial real estate sector is undergoing dynamic changes driven by economic growth, FDI, and a focus on sustainability. The city’s strategic location, improved infrastructure, and supportive government policies position it as a key player in Vietnam’s industrial landscape. However, due diligence is essential to stay abreast of the latest developments and opportunities in this rapidly evolving market. For the most current and specific information, it is recommended to consult recent reports and industry analyses.
Being the capital Vietnam, Hanoi is probably the most mature region when it comes to infrastructure. However, it does not mean it’s stop progressing. In a recent consultation workshop, the minister of Minister of Planning and Investment Nguyen Chi Dung stressed the importance of continuing investment on the city infrastructure on the capital’s planning for 2021-2030, with a vision for 2050.
In the first six months of 2023, despite a 4.3% decrease in total foreign investment capital into Vietnam, Hanoi emerged as a leading city in attracting foreign investment, with a total of $2.265 billion USD in FDI. This includes 196 new projects with $75.6 million USD, 88 projects receiving additional investment totaling $208.7 million USD, and 173 instances of capital contribution and share purchases by foreign investors amounting to $1.981 billion USD. Notably, a significant transaction by Japanese investor Sumitomo involved buying shares of VPBank on the stock exchange for $1.5 billion USD. Hanoi’s attractiveness to FDI is attributed to its competitive socio-economic environment, high-quality human resources, effective administrative reforms, and supportive policies for businesses. Despite facing challenges such as unsynchronized technical infrastructure and complex administrative procedures, the city has implemented specific solutions to enhance FDI attraction, including speeding up planning works, establishing more industrial zones, and improving infrastructure to foster investment and business expansion, particularly in high-tech fields.
7005
38848.76
375
1779.55
The industrial estate landscape in Vietnam, particularly in the Northern Key Economic Region (NKER), has shown significant growth and dynamism in recent years. As per the latest reports from Cushman & Wakefield, the Northern Industrial Market has become a spotlight for investment, mainly in the Industrial Park (IP) land and Ready-Built Factory (RBF) segments. The data indicates a robust demand and an ongoing supply expansion that signals a maturing and increasingly attractive market for investors and enterprises alike.
In the IP land segment, there was approximately 14,600 hectares of leaseable land with an occupancy rate of around 73%. The average asking price for primary IP land stood at around USD 125 per square meter on a lease term basis. The market saw a positive quarter-over-quarter (QoQ) and year-over-year (YoY) growth in both net absorption and asking prices. Hai Duong and Hung Yen provinces led the way in terms of net absorption, contributing significantly to the overall market growth. This demonstrates the region’s capacity for industrial development, bolstered by new land supply from developments such as the Thang Long II IP.
The RBF segment has also exhibited strong performance, with an overall supply of approximately 3,500,000 square meters and an occupancy rate of 74%. The average asking rent remained stable QoQ at USD 4.9 per square meter per month, marking a modest increase YoY. The net absorption was impressive, with significant contributions from Hai Duong, Hai Phong, and Vinh Phuc provinces. This segment’s demand was driven by electronics, computers, and optical products, indicating a healthy diversification of industries in the NKER.
On the other hand, the RBW (Ready-Built Warehouse) segment showed a different trend with a total supply of around 2,200,000 square meters and a lower occupancy rate of 70%. Despite the addition of significant new supply from projects such as the IDEC Logistics Center and Mapletree Logistics Park, the net absorption decreased sharply QoQ. This suggests that the RBW segment may be experiencing a period of adjustment, reflecting global economic uncertainties and a realignment of supply and demand in the sector.
Looking ahead, the market outlook for 2024 to 2026 forecasts a substantial influx of IP land supply, estimated at around 5,500 hectares across seven provinces in the NKER. For RBF, a future supply of about 1.0 million square meters is expected, with demand projected to be sustained by the manufacturing sector, particularly supporting enterprises in the electronics and automotive sectors. However, the RBW supply is anticipated to taper off, with a lower compound annual growth rate (CAGR) compared to the previous period.
