Source: Vietnam Environment Urban Electronic Magazine

The field of industrial park development in Vietnam has gone through a period of extensive development, and is currently transforming in depth, specializing in providing more products to tenants than simply clean land and Infrastructure.

At the fourth Vietnam Industrial Real Estate Forum (VIPF) 2024: “Greening to welcome new investment waves” organized by the Ministry of Planning and Investment and Investment Newspaper on the afternoon of July 30, many experts raised a bright picture with the potential to attract foreign investors through industrial park (IZ) real estate.

Mr. Le Trong Minh, Editor-in-Chief of Investment Newspaper, said that Vietnam is a bright spot on the world map in attracting foreign direct investment because of many advantages.

In the first 7 months of 2024, newly registered FDI capital reached over 18 billion USD in registered capital, an increase of 10.9% over the same period, demonstrating the strong confidence of foreign investors in the investment environment of Vietnam. Large projects in the fields of semiconductors, energy, component manufacturing, electronic products, and high value-added products tend to increase.

Recently, Vietnam is becoming the focus of attention in the semiconductor industry supply chain. Many large corporations in the fields of semiconductors and artificial intelligence (AI) such as Amkor, NVIDIA, HanaMicron… are interested and expanding in Vietnam.

The country currently has 425 industrial parks and export processing zones established with an industrial land fund of about 89,200 hectares. Accumulated by the end of 2023, industrial parks and economic zones across the country will attract over 11,200 foreign investment projects and 10,600 domestic investment projects, with total investment capital reaching 251.6 billion USD and 251.6 billion USD respectively. 2.67 million billion VND; realized investment capital reached about 68.2% and 45.3%, respectively.

At the seminar, Mr. Truong An Duong, Managing Director of the Northern Region, Frasers Property Vietnam Company, said that industrial parks in Vietnam are in the transition stage from step 1 to step 2.

Currently, Vietnam is the location often chosen from the wave of migration out of China. Ready-built warehouse and factory products meet the needs of manufacturers. This is a “ready-to-wear” product. In the next phase, there will be “tailor-made” products at the request of foreign investors. Therefore, industrial park real estate developers need to grasp this trend.

Ms. Van Nguyen, Senior Director of Northern Trading Market Division (JLL Vietnam Company) commented that the field of industrial park development in Vietnam has gone through a period of extensive development, and is currently transforming in depth, specializes in providing more products to tenants than simply clean land and infrastructure. This is a trend that attracts highly qualified investors.

However, the difficulty is that Vietnam does not have separate areas to develop spearhead and specialized industrial parks. According to Ms. Van, Vietnam’s macroeconomic policies are much more open, but the rate of improvement is still slow compared to other countries in the region.

“China is still the world’s factory, but FDI “eagles” still need production satellite locations. When “eagles” require standards and processes like in China, Vietnam has not yet had many industrial park infrastructure providers that meet this requirement well” – Ms. Van affirmed.

Mr. Dinh Hoai Nam, Director of National Business Development – SLP Vietnam Company, said that any investment model cannot be ruled out, it only needs to be effective, including the specialized industrial park model if found attractive enough.

Regarding the ability to invest in specialized industrial parks to be able to continue welcoming “eagle” investors, Mr. Nam said that Vietnam already has a few zones built according to the model of specialized industrial parks such as Sumitomo’s industrial park, or others. High-tech parks in Da Nang, Hanoi, Ho Chi Minh City… But to develop and succeed in specialized industrial parks, the market must form an ecosystem in which the role of policy creation is extremely important.