Hanoi: The quicker pace at which legal obstacles are being removed in recent industrial real estate projects is creating growth opportunities for many businesses.
Notably, it is also one of the key factors attracting investment and boosting growth for real estate this year.
The delegation of licensing authority to local governments along with newly planned and expanded industrial zones is driving the growth of the industrial real estate segment, providing a major boost for investors.
According to the approved planning schemes of 63 local governments, by 2030, Vietnam will have 221 newly planned industrial zones, while 76 existing zones will be expanded and 22 will have their planning adjusted.
Last November, the National Assembly passed amendments and supplements to a number of articles of the Law on Planning, the Law on Investment, the Law on Investment under Public-Private Partnerships and the Law on Bidding.
Notably, the amended Law on Investment requires the delegation of investment certification for industrial zones to the provincial People’s Committees, instead of the prime minister.
This decentralisation of management for industrial land will accelerate the establishment of new industrial zones.
According to experts, the licensing procedures for the establishment of new industrial zones will be sped up this year.
For example, in January, Kinh Bac Urban Development Corp made significant legal progress in key projects, such as receiving approval for the investment policy of the 687ha Trang Due 3 Industrial Park, the 585ha Trang Cat Urban Area, and the first phase of the Kim Thanh 2 Industrial Park covering 235ha.
As a result, the company’s total industrial land has increased to 6,402ha, accounting for 5.1% of the national industrial land area.
Nguyen Van Dinh, chairman of the Vietnam Association of Real Estate Brokers, said that industrial real estate remains a “star” in the market, and is predicted to continue carrying the overall market’s recovery.
Notably, large, well-known developers such as Kinh Bac, Viglacera, Becamex, Idico and others who dominate the industrial real estate market are not the only ones benefitting as many other companies are also being drawn into the race by the segment’s appeal.
Thomas Rooney, a senior analyst at property consultants Savills in Hanoi, said that although the potential is huge, most industrial-park projects in Vietnam currently being developed are still using the traditional model.
Rooney said these days, converting a conventional industrial park into an environmentally friendly zone is necessary for modern manufacturing.
However, this is not a simple task, as it involves high costs and requires time, as well as careful consideration from the government regarding the legal framework and incentive policies.
Additionally, credit support for investors is needed to help reduce the initial cost burden.
For industrial real estate to maintain its appeal and continue to grow strongly in the future, Rooney said that infrastructure and transport systems must continue to be developed and planned in a synchronised and efficient manner.
At the same time, developers and investors need to pay attention to the general trends of the industry.
This year, experts forecast that the growth potential of the segment will stem from the trend of shifting foreign direct investments into Vietnam, along with support from land prices and policies from the government. — Viet Nam News/ANN