Vietnam should further streamline red tape for industrial property investments while publicizing broadly the range of land lease fees with a view to spurring growth in the sector, experts have suggested.
Foreign direct investment (FDI) into industrial parks accounts for 35 - 40 per cent of the country’s total annual additional FDI.
According to the Ministry of Planning and Investment, the flow of foreign direct investment (FDI) into industrial parks accounts for 35 - 40 per cent of the country’s total annual additional FDI. Last year, Vietnam attracted a total of nearly US$35.46 billion in registered FDI, of which more than US$8.3 billion were for local industrial parks and economic zones.
The Vietnamese economy has been shifting towards further domestic production and exports, which creates a crucial premise for the development of key industrial parks and economic zones.
Nguyen Tran Nam, chairman of the Vietnam Real Estate Association, said that the country has developed into one of the most attractive investment destinations throughout the Southeast Asian region, particularly in the field of industrial production.
The domestic real estate market has witnessed stable growth in recent years while enjoying many upbeat developments in terms of market and incentives. This is believed to help accelerate the growth of industrial real estate which is widely considered as the most attractive sector in terms of investment, Nam noted.
He added that the market would enjoy robust growth in the short, medium, and long term if the State provides enough additional incentives and support to fully utilize its potential.
Furthermore, fresh market developments are giving an impetus to the domestic industrial property market. Most notably the ongoing US-China trade tensions are reckoned to lead to the shift of FDI flows into some Asian countries, including Vietnam. Some industrial groups and multi-national corporations are seeking investment opportunities and locations for their upcoming projects.
With these conditions, an array of golden opportunities is set on the horizon for the industrial real estate market. In order to make the most of these, the country needs to create more favourable conditions to lure additional FDI inflows, experts recommended.
Dang Hung Vo, former Vice Minister of Natural Resources and Environment.
Dang Hung Vo, former Vice Minister of Natural Resources and Environment, stressed the need to make progress in all aspects with the aim of attracting additional foreign investment. The Government should make further investment into key infrastructure and multimodal transport networks to reduce logistics costs and enable them to serve upcoming projects.
The Government is being urged to foster reforms to simplify administrative procedures, including those related to customs, and increase efficient linkages among economic sectors.
Land use fees in nationwide localities must be defined and publicized broadly in order to breed more confidence among investors. This will enable financiers to be updated on the fees and relevant costs. Localities need to offer additional incentives with regard to land leasing, production facilities, and technical infrastructure.
Industrial property has been subsidized by the State as the establishment of industrial parks must be submitted to the Prime Minister for approval. Moreover, industrial park developers have to ask for permits from the heads of provincial-level People’s Committees for industrial cluster projects, Vo said.
He proposed that the establishment of industrial parks should be carried out as planned previously, rather than going down the path of seeking for permission from local authorities.