Growth prospects from industrial real estate businesses

According to the Bank for Investment & Development of Vietnam Securities Company, although attracting FDI in 2020 is still at a low level and decrease compared to the same period, it tends to increase and improve because of the rapid response to COVID pandemic.

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Many advantages to attract investment

According to the Bank for Investment & Development of Vietnam Securities Company (BSC), Vietnamese FDI/GPD Index is the highest in the religion (6.2%). That means Vietnam is still outstanding to attract FDI compared to other countries in the same region.

Besides, Vietnam is participating in a series of free trade agreements (FTAs), including EVFTA, which promises to attract foreign investors. Government tax incentives are also a catalyst for investment attraction.

Besides, Vietnam also has many other advantages such as: labor costs of Vietnam for manufacturing activities are quite competitive compared to the regional level; The Government also strives to improve the investment environment, establishing industrial zones and economic zones at the regional average level; Construction costs are low; Macro situation is stable: VND volatility is more stable compared to IDR and MYR.

Before is the US- China trade war and now is COVID – 19 making the wave of relocation from China even stronger.  Vietnam is the potential location for the relocation.

According to BSC’s assessment, the industrial real estate market in the North focuses on two major markets, Bac Ninh and Hai Phong. The occupancy rate of industrial zones in the North increased slowly in the third quarter of 2020, reaching 74%. The reason is that the land lease process in industrial zones slowed down due to the COVID – 19 pandemic. However, the North has many advantages in being developed infrastructure, geographically close to China, so it is expected to benefit from the wave of relocation from China.

Meanwhile, the industrial real estate market in the South focuses on localities such as Binh Duong, Dong Nai and Ho Chi Minh City. The occupancy rate of industrial zones in the South is higher, reaching over 82%, due to the lack of clean land in the South to establish new industrial zones. The areas with remaining supply to meet tenants will be the next destinations for manufacturers: Dong Nai, Ba Ria – Vung Tau, Tay Ninh and Long An.

Prospects from businesses

BSC forecasts that Kinh Bac City Development Holding Corporation (HoSE: KBC), has been investing in the North such as Bac Ninh, Hai Duong, Hai Phong, will benefit from the relocation of factories from China.

Meanwhile, the Vietnam Rubber Group (HoSE: GVR), with its leading position in the industry, the conversion of rubber plantations into industrial zones, as well as investing in public projects will accelerate the transition of rubber soil faster.

Wood processing is expected to grow again after the COVID – 19 pandemic but will also become more competitive, BSC expects exports of wood and wood products will recover, supporting domestic demand for wood.

IDICO Corporation (HoSE: IDC) with large industrial land, about 880ha is located in the provinces of Dong Nai, Ba Ria – Vung Tau, Long An, Bac Ninh, Thai Binh … ensuring long-term growth.

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