Trending towards green industrial parks for capital attraction

Investing in high-tech projects that utilise clean raw materials and reduce carbon emissions into the environment is the current global trend.
Trending towards green industrial parks for capital attraction
Factories at the Long Thành Industrial Park in Đồng Nai Province.

Traditional industrial zones are gradually losing their competitive edge and being replaced by industrial zones that prioritise green and sustainable elements, making them more appealing to investors, said experts.

The development of green industrial zones involves participating in cleaner production practices and minimising negative environmental impacts, with the aim of achieving zero carbon emissions by 2050. Building green industrial zones to attract investment in the green industry is a prevailing global trend.

From a management perspective, Deputy Minister of Planning and Investment Nguyễn Thị Bích Ngọc said that the transition towards a green and circular economy in industrial zones and economic zones is a crucial factor in enhancing competitiveness and ensuring sustainable development for each specific area and the overall economy.

With 403 operational industrial zones, promoting the development of eco-industrial zones will mobilise significant resources from the private sector to implement green industrial solutions, ensure energy security, and make a substantial contribution to Việt Nam’s climate change mitigation efforts.

This will drive green growth and circular economy practices, reflecting the strong political commitment of the Vietnamese Government towards sustainable development.

The summary report on 30 years of industrial zone and economic zone development by the Ministry of Planning and Investment showed that by 2030, 40-50 per cent of localities will have plans to convert existing industrial zones into eco-industrial zones, while 8-10 per cent of localities will aim to establish new eco-industrial zones, starting from the stage of construction planning and industry-specific investment attraction.

The simultaneous focus on constructing new eco-industrial zones and transforming traditional industrial zones into eco-industrial zones is evident.

MB Securities JSC (MBS) has observed a trend of investment capital shifting towards secondary markets located away from major cities due to their large supply and lower rental prices.

Despite facing new challenges, there are several supporting factors in the development of industrial real estate. Currently, India and Indonesia are the biggest competitors with Việt Nam in attracting foreign direct investment (FDI) in the high-tech sector.

Nevertheless, the country holds competitive advantages thanks to signed trade agreements and attractive labour and electricity costs. Strengthening the strategic partnership with the US will also contribute to attracting investment in high-tech development.

In the northern region, there is a noticeable trend of FDI capital flowing into secondary markets. For example, Quảng Ninh Province has attracted over US$3.1 billion in FDI, ranking third nationwide in 2023. The Jinko Solar Hai Ha photovoltaic cell project, with a $1.5 billion investment, stands out as a representative example.

Bắc Giang Province has also successfully drawn in $3 billion in FDI, 2.5 times higher than the previous year, with the Hana Micron Vina 2 semiconductor production project contributing $0.6 billion.

The proportion of FDI inflows into secondary markets has shown a significant increase, from 20 per cent in 2018 to 53 per cent in 2023.

This can be attributed to lower industrial land rental prices compared to primary markets in major cities, as well as the availability of ample commercial land with a market occupancy rate of only 64 per cent in the secondary market.

In the southern region, there is a rising trend in the proportion of FDI capital flowing into secondary markets in 2023, up from 21.6 per cent in 2022 to 23.2 per cent in 2023.

Bà Rịa-Vũng Tàu Province attracted over $1 billion in FDI, with a notable investment of $540 million in Hyosung Vietnam's fibre and carbon material production project.

Bình Phước Province successfully lured over 40 FDI projects with a total investment of $758 million, marking a 3.4-fold increase over 2022.

The growth was mainly driven by the advantages of the availability of industrial land for leasing, as the occupancy rate in the secondary market is only 63 per cent, while the primary market has reached 90 per cent.

Moreover, rental prices in the secondary market are only half those in the primary market.

By the end of 2023, the total industrial land area in Việt Nam reached 89,200ha, up 1.5 per cent from the end of 2022, mainly thanks to the growth in the northern market.

The total leased industrial land area reached nearly 51,800ha, a 5.7 per cent increase over the end of 2022, with an occupancy rate of around 57.7 per cent.

For operational industrial zones specifically, the occupancy rate reached approximately 72.4 per cent. Rental prices in the southern region remained stable at $168 per sq.m, while rental prices in the northern region increased by 10 per cent from the end of 2022 to $123.

MBS believes that the prospects of the industrial park industry in the future come from stable macroeconomic conditions and improving relations with major economies to help maintain the momentum of rising FDI.

New obstacles arise

However, new challenges will come in the form of increased competition from other countries or the risk of electricity shortages impacting production.

Enterprises with large clean land funds and healthy finances will have long-term growth potential.

SSI Securities Corporation said that disbursed FDI capital into Việt Nam reached $23.2 billion last year, an increase of 3.5 per cent year-on-year, mostly focusing on the manufacturing sector.

Meanwhile, the total committed FDI capital in 2023 rose 24.4 per cent on-year to $28.1 billion.

As a result, the securities firm expects FDI capital to continue to maintain growth in 2024, focusing on the manufacturing sector (manufacturing and semiconductor enterprises) and renewable energy.

SSI said that many listed industrial park investors have signed a Memorandum of Understanding (MOU) on leasing industrial land to new tenants in the second half of 2023, so these MOU contracts are likely to be converted into official contracts and recorded as revenue in 2024.

For industrial parks in the north, demand for industrial park land rental is expected to be high in 2024, driven by the trend of shifting production facilities to Việt Nam, mainly in the electronics and semiconductor industries.

Industrial parks in the south may record a technical recovery from a low base in 2023, with the main businesses leasing industrial land being manufacturing businesses (textiles, wood, footwear), logistics and food and beverages.

Thanks to the favourable business environment, many industrial real estate companies reported large profits in 2023.

For example, Becamex (BCM) reported a revenue of about VNĐ8.2 trillion in 2023, an increase of nearly 25 per cent from the previous year, while its profit after tax reached over VNĐ2.3 trillion, the highest level since 2020.

Sonadezi Long Thành (SZL)’s net revenue was VNĐ441 billion last year and profit after tax was VNĐ104 billion, up 7 per cent and 4 per cent year-on-year, respectively. Meanwhile, Sonadezi Châu Đức (SZC) posted a profit of VNĐ218.87 billion in 2023, up 10.89 per cent from the year before.

Thanks to positive business results, the group of industrial real estate stocks also performed strongly recently, such as in the week to February 2, SNZ increased by 22.74 per cent, SZC rose 8.52 per cent, Sai Gon VRG Investment Corporation (SIP) climbed by 7.73 per cent, IDICO Corporation (IDC) increased by 7.37 per cent, BCM was up 4.44 per cent, and SZL increased by 1.96 per cent.

Source: VNS
vietnamnews.vn

Related News

Latest News

US initiates investigation into pharmaceutical capsule shells imported from Việt Nam

US initiates investigation into pharmaceutical capsule shells imported from Việt Nam

Hard capsule pharmaceutical shells from Brazil, China and India are also being investigated.
UKVFTA gives advantages to Vietnamese fishery products in the UK, urging focus on quality for further expansion

UKVFTA gives advantages to Vietnamese fishery products in the UK, urging focus on quality for further expansion

To better exploit the tariff incentives from the UKVFTA, it is necessary for Vietnamese fishery producers and exporters to focus on improving quality and supply capacity to expand market share in the UK
Agricultural, forestry and fishery trade surplus value shoots up

Agricultural, forestry and fishery trade surplus value shoots up

VCN - According to the Ministry of Agriculture and Rural Development, the total export turnover of agricultural, forestry and fishery products in the first 10 months reached 51.74 billion USD, up 20.2% over the same period in 2023. Notably, the trade surplus value recorded a spectacular increase year on year.
New export and business cooperation opportunities from "dual conversion"

New export and business cooperation opportunities from "dual conversion"

VCN - According to a recent study from NielsenIQ, 16% of Vietnamese consumers consider a sustainable future as one of the important factors in their consumption decisions.

More News

VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Approach strategy of the seafood industry when implementing UKVFTA

Approach strategy of the seafood industry when implementing UKVFTA

VCN - As one of Vietnam's strong export industries to the UK, especially when the Vietnam - United Kingdom of Great Britain and Northern Ireland Free Trade Agreement (UKVFTA) comes into effect, with a detailed information approach strategy, it has created a great driving force to promote the export of Vietnamese seafood products to this market.
Mid-November: Vietnam

Mid-November: Vietnam's trade volume matches 2023 total, eyes record-breaking growth

VCN - By mid-November 2024, Vietnam's total import-export turnover reached an impressive US$681.48 billion, equaling the full-year trade figure for 2023
Vietnamese enterprises facing challenges from cross-border e-commerce platforms

Vietnamese enterprises facing challenges from cross-border e-commerce platforms

VCN – In recent years, with the rapid development of cross-border e-commerce (CBEC) platforms, domestic enterprises in Vietnam have been facing numerous difficulties and challenges.
Vietnam, Malaysia eye new milestone in trade ties

Vietnam, Malaysia eye new milestone in trade ties

The official visit to Malaysia from November 21-23 by Party General Secretary To Lam is expected to open up new opportunities for and mark a new milestone in the economic and trade cooperation between Vietnam and Malaysia. Vietnam and Malaysia are key economic, trade, and investment partners. Their economic and trade ties have steadily grown since the two nations established diplomatic relations in 1973.
Shrimp exports surge in 10 months, generating 3.2 billion USD

Shrimp exports surge in 10 months, generating 3.2 billion USD

Vietnam’s shrimp exports in October reached US$394 million, a strong 24% increase year-on-year, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).
Vietnam’s exports to the U.S. near US$100 billion milestone

Vietnam’s exports to the U.S. near US$100 billion milestone

VCN - By the end of October, Vietnam's exports to the United States approached US$100 billion, reaffirming its position as Vietnam's largest export market.
From the “abnormal” coffee price, worries about the new crop

From the “abnormal” coffee price, worries about the new crop

VCN - The Vietnamese coffee industry enters the new crop with the question of what is a reasonable price to ensure benefits for coffee growers while still retaining international consumers.
What obstacles limit the market share of Vietnamese goods in the UK?

What obstacles limit the market share of Vietnamese goods in the UK?

VCN - Vietnamese goods account for only about 1% of total imports into the UK market. One of the reasons is that they have not yet built their own brands and have not focused on effective strategies and approaches to market information.
Read More

Your care

Latest Most read
US initiates investigation into pharmaceutical capsule shells imported from Việt Nam

US initiates investigation into pharmaceutical capsule shells imported from Việt Nam

Hard capsule pharmaceutical shells from Brazil, China and India are also being investigated.
UKVFTA gives advantages to Vietnamese fishery products in the UK, urging focus on quality for further expansion

UKVFTA gives advantages to Vietnamese fishery products in the UK, urging focus on quality for further expansion

To better exploit the tariff incentives from the UKVFTA, it is necessary for Vietnamese fishery producers and exporters to focus on improving quality and supply capacity to expand market share in the UK
Agricultural, forestry and fishery trade surplus value shoots up

Agricultural, forestry and fishery trade surplus value shoots up

VCN - According to the Ministry of Agriculture and Rural Development, the total export turnover of agricultural, forestry and fishery products in the first 10 months reached 51.74 billion USD, up 20.2% over the same period in 2023. Notably, the trade surp
New export and business cooperation opportunities from "dual conversion"

New export and business cooperation opportunities from "dual conversion"

According to a recent study from NielsenIQ, 16% of Vietnamese consumers consider a sustainable future as one of the important factors in their consumption decisions.
VN

VN's food processing industry struggles to improve quality and value chain integration

Despite accounting for 19.1 per cent of Việt Nam’s processing sector, the food processing industry has been struggling with major issues such as poor-quality raw materials and subpar value chain integration, said industry insiders and economists.
Mobile Version