The Van Trung Industrial Park in northern Vietnam’s Bac Giang province. VIETNAM NEWS AGENCY
Vietnam will remain one of the best investment destinations for industrial real estate in Southeast Asia for the next 10 years and beyond, experts said at a conference in Ho Chi Minh City last week.
Speaking on the sidelines of the “Industrial Real Estate: Filling in and Filling up” conference, Kenny Gaw, president and co-founder of Gaw Capital Partners, an equity fund management company, told Viet Nam News: “Vietnam is expected to continue moving up the value chain thanks to its stable growth, export-oriented economy, a highly skilled workforce and strategic location.”
“With favourable incentives, competitive labour costs, a stable political environment, a positive economic outlook and free trade agreements, Vietnam has also become favoured by foreign investors moving out of China.”
Furthermore, Vietnam is experiencing a golden population structure, with 60 per cent of its population very young, productive and hardworking.
It also boasts a strategic geographical location in the heart of Southeast Asia, which is home to several large and vibrant economies, he said.
It is particularly involved in Trans-Pacific Partnership negotiations, Gaw noted.
“Vietnam’s upcoming industrial property evolution will be the foundation for attracting additional foreign direct investments [FDI],” he added.
The nation’s economic growth, accompanied by the boom in modern retail trends like e-commerce and waves of foreign investment in manufacturing facilities in Vietnam, demand for high-quality industrial property will continue to rise, conference participants said.
The establishment of new industrial zones and key industrial projects beginning operations early this year augur well for the sector.
Economists, meanwhile, have expressed confidence that the Vietnamese economy will bounce back this year.
Though the fourth wave of outbreak has profoundly impacted the manufacturing sector in Ho Chi Minh City, Vietnam’s commercial hub, the country remains a popular foreign investment destination.
FDI should pick up this year as countries reopen around the world and learn to adapt to new normal conditions.
“The increasing number of large-scale FDI projects expanding investment capital shows foreign firms are feeling settled with the overall economic recovery initiated since late last year,” Gaw said.
He noted that “Vietnam has excelled in reeling in the big fish in electronics, footwear, and clothing in recent decades. Productive labour costs, reliable infrastructure, and a smooth bureaucratic process have drawn the attention of major brands such as Samsung, Foxconn, Nike, Adidas, Gap, Levis, Luxshare, Pegatron”.
Mai Huu Tin, president of U&I Investment Corp and a member of the Private Sector Development Committee, said the industrial real estate sector is considered a bright spot this year.
Those in the industrial park business benefit from increased demand and rentals, he said.
However, with the country facing a number of environmental challenges, industrial estate developers will have to focus on green growth, several experts said at the conference.
They said Vietnam needed to conduct a comprehensive review of available resources, particularly land, as well as energy capacity, to make the most of foreign investments.
It also needs to improve human resources, build supporting industries and give preference to FDI projects that use modern technology.
In the first two months of this year, Vietnam received $2.1 billion worth of new foreign investment and disbursed $1.6 billion in public investment for respective increases of 6.8 per cent and a 4.2 per cent over the same period last year.
VIET NAM NEWS/ASIA NEWS NETWORK
