18/08/2020

Long An real estate in time of possible big investment flowing into industrial parks

This is one of the most mentioned places in the South thanks to the outstanding advantages attached with the rising industrial real estates. So what does the market look like under the investor's point of view?  

Almost USD 220 million invested into industrial parks in the beginning of 2020

According to Long An’s Economic Zone Management Board, there were 56 new projects in the industrial zones within the first 5 months of 2020. Specifically, 41 of those are FDI projects with total investment of USD 219,5 million and 15 DDI projects with total investment of VND 688 billion. Besides, 37 projects have their capital investment increased to USD 48.2 million and VND 2,341 billion.

Within May this year, 11 new projects have been started across the industrial zones in the province, of which 7 were FDI projects with total investment of USD 12.6 million and 4 DDI projects with total investment of VND 275 billion VND.

The rising of industrial real estate is pulling the growth of  residential real estate in Long An 

So far, the number of industrial projects have gone up to 1,588, including 786 FDI projects and 802 DDI projects. Total investment (new investment and increment) has soaked to over USD 4,468 million and VND 89,532 billion.

Long An’s Economic Zone Management Board has been actively supporting the investors in the compensation process and site clearance before the end of 2020 to develop at least 3 industrial parks, attracting new investors to build production and business

Long An’s industrial production index has increased by 15.4% compared to the same period in 2018 according to a previous report from the Department of Industry and Trade. The industrial parks have clearly created a great advantage for the province . It is worth noting that many companies have initiated their industrial park projects right after the social distancing period ended, in response to the upcoming shifting and expanding production of foreign investors.

Long An real estate is benefiting from the flow of  investment into industrial parks

Troy Griffiths, Deputy Managing Director of Savills Vietnam, commented that the significant increase in foreign direct investment along with the shift in the value chain has ignited a bright future for the industrial real estate market in Vietnam. The satellite cities of Ho Chi Minh City such as Binh Duong, Dong Nai, Long An and Ba Ria - Vung Tau are the most benefited. In which, Long An is being considered as a new option beside two existing industrial investment areas Binh Duong and Dong Nai

JLL reported Long An’s rental increase rate is at the highest levels compared to other industrial real estate markets in the South. At the moment, the rental price of industrial land in Long An ranks second among the major industrial capitals in the South, surpassing USD 100 per m2 per rental cycle.

In addition to popular markets such as Duc Hoa, the investment demand is rising in areas such as Can Duoc, Can Giuoc, etc. where the prices are still low so there is room for increment.

With a favorable location in the golden triangle angle, plenty of vacant land, relatively low land price, and an intensive infrastructure development, Long An has become a "magnet" drawing people from other parts of the country to work and settle down here. This is the essence to stimulate the development of the industrial zones in the province, followed by the growth of the housing real estate sector.

Besides land which is the major segment, Long An real estate market has diversified product segments to encourage both resettlement and investment. Examples include shophouses, townhouses, villas, etc. of different sizes in the urban areas with well-invested infrastructure and facilities. In addition to familiar markets like Duc Hoa, the investment is flowing into Can Duoc, Can Giuoc areas where real estate price is relatively low, thus there is large room for the price increase. 

Vo Huynh Tuan Kiet, Deputy Director of CBRE Vietnam, said that the real estate market in neighboring areas of Ho Chi Minh City such as Long An, Binh Duong, Dong Nai, Ba Ria - Vung Tau, etc. is benefiting from the movement of the real estate companies and buyers. In particular, the majority of people buying properties in neighboring provinces comes from Ho Chi Minh City, which means that the demand for real estate around Saigon is quite large. The housing demand is predicted to significantly increase accompanying the rise of industrial zones and Ho Chi Minh City’s population reallocation strategy will trigger the large flow of investment into Long An’s real estate.  

Sharing this point of view, the representative of a real estate company commented that industrial and real estate are related. The opportunity for industrial real estate is also an opportunity for housing real estate. In regions with major industrial parks such as Dong Nai, Binh Duong, Long An, etc., residential areas are established within a radius of 5 to 10km, creating an ecosystem servicing people working at the industrial park, including professionals and labor workers. 

However, he also said that it must be a parallel development based on a careful assessment of the real housing demand in industrial zones to build an appropriate development plan and products.

Source: CafeF