July 13, 2020 00:59

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Investing in land next to the industrial zone: Should it be?

10:48 | 04/10/2019

VCN - Investing in land plots adjacent to industrial parks is attracting a large number of investors. But in the opinion of some experts, this investment is potentially risky.

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A valuable industrial park land plot project is invested in a synchronous planning of infrastructure and techniques such as electricity, water supply, hospitals, and schools. (Illustration).

Not easy to recognise reality and virtuality

The current major trend of land plot investors next to industrial zones is to buy land to build inns, hotels, motels, workshops, or to sell food, entertainment and entertainment services to the large number of workers working in industrial zones. However, according to some experts, tenants near this area are mainly workers, young households with low incomes, so they will be precarious because they often relocate their jobs; the stability is not high. Therefore this type is suitable for investors with idle capital.

Through research, the current land price of Dong Van industrial park, Ha Nam province has increased; many investors invest much money in this area in the hope of quick profit. They suppose there is a high demand for consumption, plus "winged" advertisements about the converging trade land, convenient transportation and the gateway to the capital make many people assume this is fertile ground for investment.

With Hanoi, the city government licensed the super smart urban project in Hai Boi, Vinh Ngoc, or Kim Quy Park project in Ngoc Chi, Vinh Ngoc, Information Technology Park Project, the National Exhibition Centre project, especially Dong Anh Information will become the district by 2020, which has an impact on the land market in locations near the district's industrial park.

According to some brokers operating in Dong Anh, land prices increased to 5 million VND / m2 in just a few weeks. And when there is a need, investors aim for odd lots of land located near industrial parks to build inns, factories and then rent them out. However, the expectation and will of investors are one thing and whether the land market is profitable or not is another story. Many investors are lucky, but many others suck in bitter because the price does not rise, the demand for transactions is not exciting, it is difficult to sell.

An investor of land in Dong Van area could not hide his concern that through the development process, this industrial park is in danger of causing environmental pollution, so buyers to invest in business, service businesses shy away from fears of affecting health.

According to Nguyen Van Dinh, Vice President and General Secretary of Vietnam Real Estate Brokers Association, investing in land plots next to industrial parks is contrary to the trend of urban development by the current city, urban areas tend to shift industrial parks away from residential areas to minimise impacts of industrial parks on people's lives.

Therefore, experts do not encourage investment in land plots. Investments in land plots belong to a few speculative groups or to invest in business. However, many customers due to inaccurate information collection or "virtual" advice from real estate brokers rush to buy industrial land. Rumours such as highways are about to be developed or new urban areas are about to be built near industrial parks are often launched to attract customers' attention, pushing up land prices in the area near planning areas.

“The prime example is the unofficial information about the relocation of the government's headquarters to Ba Vi in 2010, which led the people of the capital to rush to buy land around the area to speculate and push up Ba Vi land prices. Because of high price and inaccurate information, customers who bought land here suffered a great shock as well as left many material losses when having to borrow, accumulate money to buy houses but eventually sold again," Dinh said.

Need to doubt the "cake drawing"

An industrial park land plot is only valid when it is invested in a synchronous planning on infrastructure and techniques such as electricity, water, hospital, school. In addition, this area also needs to consider feng shui factors, geography and information on the long-term development planning of the Government. In this way, the new project will achieve feasibility and good liquidity for customers who buy land.

The land plots next to the industrial park have virtual information, or "wheel drawings" offered by brokers on profits or the rapid development of landscapes, urban areas, facilities and utilities when it is not formed in practice will not bring real value to customers. Therefore, as recommended by real estate experts, before making a decision to buy land in an industrial park, you should not be passive and follow the majority but should actively collect enough information and consider the actual situation of the project to be able to make a wise choice.

In addition, investors from other places investing in a new locality may not have enough time to feel the pollution from the air and water sources in the area near the industrial park. But this factor will keep people from the project, resulting in deserted land and depreciation. Many projects "painted" busy urban areas and tourist areas right next to the industrial zone. But in fact, no one will stand up to the pollution of dust and smoke in industrial parks and tourism is impossible.

Standing Vice Chairman of Vietnam Association of Real Estate Brokers Nguyen Van Dinh said investors should choose projects with easy locations connecting with the administrative, economic centre or adjacent to other areas or existing industrial and residential areas with full utilities because these locations will meet demand for accommodation or rental.

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In addition, you should only buy land that has been legally completed; in particular, land areas and projects that have red books, are not entangled in planning and have construction permits are safe assets because the type of legal ground lacks transparency will be a big risk for investors. Not to mention, the massive development of suburban real estate makes many people concerned about the quality of the project. Therefore, branded projects from reputable investors always attract the attention of many customers.

By D.Ngan/Bui Diep