Industrial real estate developers are using clean land funds and building workshops for lease in anticipation of a wave of foreign investors relocating to Vietnam
In mid-May 2018, BW Industrial, a joint venture between Warburg Pincus and Becamex IDC, presented its business before the public in Binh Duong province.
With initial capital of US$200 million, of which the foreign partner contributes 70%, the joint venture specializes in providing multi-national groups with modern storehouses, ready-built production workshops and other industrial real estate projects.
It has acquired eight projects with the right to use 2 million square meters of industrial land being developed in Binh Duong, Dong Nai, Hai Phong, Hai Duong and Bac Ninh.
The Taiwanese invested Tan Thuan Co Ltd (TTC), the investor of the Tan Thuan Export Processing Zone (EPZ), has been prospering with leasing of multi-storey workshops.
Most recently, it put an 8-storey workshop block into exploitation, following success with three other workshop blocks which are now fully occupied.
Japanese investors are especially keen on ready-made workshops, with a series of projects developed by Chodai, Shimizu, Daiwa House Industry, Kobelco Eco-Solutions and JESCO Holdings in cooperation with Vietnamese partners.
The two serviced workshop blocks with total area of 71,000 square meters in Long An developed by Kizuna JV have attracted more than 80 foreign and domestic investors. It is developing Kizuna 3 which is expected to provide 40 workshops.
In late March, Amata Vietnam received new investment registration certificates which allowed it to implement a project in an industrial area in Quang Ninh province.
With the project, covering an area of 714 hectares in Quang Ninh province, Amata will make its presence in the north, following the success of Amata City Bien Hoa project in the southern province of Dong Nai, which has attracted 165 investors from 20 countries and territories.
Hemaraj from Thailand is joining forces with a Vietnamese company to develop an IZ-urban area in Nghe An province with investment capital of US$1 billion.
Real estate developers last year worried about the US withdrawal from TPP, fearing that foreign investors may reconsider their investment decisions in Vietnam.
However, despite the absence of the US in the new CPTPP, Vietnam remains an attractive destination for foreign investors and the country is now considered a new world production center.
Many multi-national groups are considering relocating their production to Vietnam, where the labor cost is one-fourth of that in China.
The continued strong flow of FDI into Vietnam, plus the expansion of domestic businesses, means increased demand for workshops and great opportunities for real estate developers.