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Industrial Real Estate - Nine industrial zones established in the first half of 2022

In the first half of 2022, nine new industrial zones with a total area of 2,472 hectares were established. The total investment capital of the projects is VND 29,411 billion and is expected to come into operation at the end of 2023 to 2025.

Situation about 09 new industrial zones in the first half of 2022

According to SSI Research, as of June 2022, the whole country has 563 industrial parks included in the Development Plan of Industrial Parks in Vietnam (including industrial zones in coastal economic zones, border gate economic zones) with a total natural land area of about 210.9 thousand hectares. Of the 563 planned industrial zones, 406 industrial zones have been established, including 361 industrial zones located outside economic zones; 37 industrial zones are located in coastal economic zones, 08 industrial zones are located in border gate economic zones.

Thus, in the first half of 2022, 09 new industrial zones with a total area of 2,472 hectares were established. Total investment capital of the projects reached 29,411 billion VND. The projects also stipulate the construction period from 3 to 4 years from the date of establishment and the operation period from 50 years from the date of establishment. Therefore, the supply of these new industrial zones is likely to come into operation by the end of 2023 to 2025.

Some key information of 09 newly established industrial zones is summarized in the following table

Prospects for the development of new Industrial Parks

According to JLL, in the first quarter of 2022 in the South, there are 2 industrial zones put into operation, namely VSIP 3 in Binh Duong (total land area of 1,000 hectares) and Amata Long Thanh hi-tech industrial park (total area of 410 hectares bringing the total land fund in the South to 25,220 hectares. At the same time, in the North also started construction of Thuan Thanh I industrial park, Bac Ninh has brought positive signals to the market right in the first quarter of the new year, adding 160 hectares of land for lease and bringing the total industrial land area in the North to more than 10,024 hectares.

In the coming time, it is inevitable that big cities focus on establishing and developing new industrial zones when (i) Decree No. 35/2022/ND-CP of May 28, 2022 comes into effect, helping to reduce some procedures for the establishment of industrial zones; (ii) demand for land rental continues to increase; and (iii) localities to focus on attracting investment and developing industrial production to contribute to accelerating the process of industrialization and modernization of the country. For example:

• On January 7, Hanoi People's Committee issued Decision No. 65/QD-UBND approving the Project “Establishment of 2-5 new industrial zones, period 2021-2025”, including Soc Son Clean Industrial Park, Soc Son district with an area of 302.8 hectares in two communes Minh Tri and Tan Dan; Dong Anh Industrial Park, Dong Anh District with an area of 300 hectares in communes Nguyen Khe, Xuan Non, Thuy Lam, Lien Ha and Dong Anh town; Bac Thuong Tin Industrial Park, Thuong Tin district with an area of 112 hectares in Van Binh, Ninh So and Lien Phuong communes; Expanded Phu Nghia Industrial Park, Chuong My district with an area of 389 hectares in Phu Nghia, Truong Yen, Ngoc Hoa communes; Phung Hiep Industrial Park, Thuong Tin district with an area of 174.88 hectares in Dung Tien, Nghiem Xuan, To Hieu, Thang Loi communes.
• Hai Phong city is also focusing on implementing procedures to establish 6 new industrial parks with a total area of 2,758 hectares. Specifically, the project of Xuan Cau Industrial Park (after port services) with an area of 752 hectares located in Dinh Vu-Cat Hai economic zone, has been approved by the Prime Minister on investment policy. Five projects including Nam Trang Cat Industrial Park, Thuy Nguyen Industrial Park, Tien Thanh Industrial Park, Trang Due Industrial Park, and Giang Bien 2 Industrial Park have submitted dossiers of application for approval of investment policies at the Ministry of Planning and Investment.

Although there are still difficulties to face such as slow progress of compensation and clearance, high recovery costs, and high resettlement support, it is clear that the opportunities for the industrial park real estate industry are huge. Therefore, in the coming time, most industrial park real estate businesses have set high growth business plans for 2022 and expect a stronger and stronger industrial real estate market.

Ly Tran (Paralegal)