INDUSTRIAL REAL ESTATE SUPPLY SHORTAGE FROM NOW TO THE END OF THE YEAR

The positive factor of the real estate market gradually faded and the challenge of scarce supply and competitive ability to attract FDI began to weaken.

New supply decreases

According to VnDirects recent report on the industrial real estate segment, this unit finds that the positive factors supporting the industrial real estate industry are fading, coming from gradually emerging challenges (1 ) the industrial zone real estate market will witness a scarcity of new supply in 2023 when the approval procedure is delayed due to legal procedural problems, (2) Vietnams competitiveness in attracting FDI is gradually weakening compared to other countries in the region.

"The industrial park real estate market will go through a difficult time in the implementation of new projects, leading to a shortage of supply until the end of 2023," VnDirect said.

For the southern market, after the supply boom in the first half of 2022, no new supply has been put into operation.

This unit believes that the southern market will experience a difficult period to deploy new projects in 2023. After that, the new supply for the period 2024-27 is also quite limited, at about 1,388 hectares.

"Some notable projects in the future will mainly come from large industrial park developers such as Cay Truong Industrial Park (owned by BCM) and Nam Tan Uyen Expanded Industrial Park (owned by NTC)," VnDirect stated in the report.

With the Northern market, although many projects are waiting to be approved, approved, however, the shortage of new supply in the northern market will last at least until the end of 2023, after which about 3,757ha of industrial land is expected to be put into operation in the period 2024-2026, with the source The largest suppliers come from Hai Phong, Vinh Phuc, and Bac Ninh.

"Although the two industrial park centers will be scarce for new supply, this is an opportunity for businesses owning land banks ready to lease," this unit said.

A limited supply will shape 2 shifting trends

In that difficult context, VnDirect believes that the industrial park real estate market will be reshaped by new trends that only developers possessing the following characteristics can turn challenges into opportunities. festival.

Firstly, the strategic location in tier-2 markets, providing competitive rents and proximity to large infrastructure projects, creating a convenient connection system to the center, airport, and seaport...

Specifically, this unit believes that the tier 2 market is offering more competitive prices thanks to the relatively large difference between the rents of tier 1 and tier 2 markets in the whole South (the difference is $120/m2). /lease term) and the North (difference USD 56/m2/lease term) at the end of Q1/2023.

While the tier 1 market has a rather limited available land fund, the tier 2 market has an abundant available land fund, leading to a slower increase in rental prices in the tier 2 market than in the tier 2 market. 1 at least for the next 3 years. In addition, the available land bank in the secondary market offers more options for tenants, especially when traffic connectivity is increasingly improved.

Besides, the labor cost in the tier 2 market is also lower than in the tier 1 market.

Secondly, the land bank is available for lease, which is large and developed in the direction of a multi-use warehouse, with utilities according to ESG standards.

"We found that traditional ready-built warehouses/factories (simple warehouses) could no longer meet demand as e-commerce boomed. Multi-purpose warehouses are a better choice for space. The limitation comes from taking up less land and increasing storage space. The growth of e-commerce and the desire for fast and efficient delivery to consumers will be suitable for growth. develop multi-use warehouse", VnDirect commented.