Surging Demand from Foreign Investors Drives Up Industrial Land Rents in Vietnam

This year, industrial land lease rents in the north and the south have experienced significant increases of 35% and 14.5% respectively, primarily due to a surge in foreign investors, particularly in the manufacturing sector. According to Savills Vietnam, in the north, average rents have risen from $102 to $138 per square meter. In southern industrial hubs such as Binh Duong, Dong Nai, Ba Ria Vung Tau, Long An provinces, and Ho Chi Minh City, rents have increased from $152 to $174.

Binh Duong, Dong Nai, and Ho Chi Minh City currently boast occupancy rates of 99%, 96%, and 95% respectively. However, only Long An and Ba Ria Vung Tau provinces have available industrial lands for lease, with occupancy rates of 85% and 78% respectively. John Campbell, associate director and head of industrial services at Savills, emphasized the urgent need for new supply in Binh Duong, Dong Nai, and Long An.

A recent report by Savills revealed that industrial parks nationwide have an average occupancy rate exceeding 80%. Vietnam currently has 397 industrial parks spanning a total leasable area of 122,900 hectares, with an additional 106 parks covering 35,700 hectares under construction. It is worth noting that 10,000 square meters make up one hectare.

In the first nine months of this year, Vietnam attracted over $20.2 billion in foreign direct investment (FDI), marking a 7.7% increase compared to the same period last year. Manufacturing accounted for $14 billion of this total, reflecting a year-on-year growth of 15.5%, as reported by the Foreign Investment Agency.

Savills has observed a growing demand for industrial land, receiving an increasing number of requests and conducting site surveys for multinational companies in manufacturing, logistics, e-commerce, and other sectors. Notably, Fulian Precision Technology Component, a subsidiary of Foxconn, recently acquired a 45-hectare land lease in the Quang Chau Industrial Park in Bac Giang Province for $62.5 million, allowing them to assemble iPads and AirPods for Apple until February 2057. Additionally, Chinese tire maker Shandong Haohua Tire has rented 43 hectares in the Minh Hung – Sikico Industrial Park in Binh Phuoc Province.