In the first 9 months of 2024, the factory rental market continued to grow, attracting many projects of FDI capital flows shifting to Vietnam.

As reported by Vietnam Investment Consulting, the industrial warehouse market is showing many positive signs with an average occupancy rate nationwide reaching 77%, rising by 4% over the same period in 2023.

Factory for rent in Long Thanh Industrial Park (Dong Nai)

Investors prioritize renting the factories in industrial parks

The market data of Cushman & Wakefield Company presents that factory rental activities from the second half of 2023 to now have been more vibrant, the absorption rate of ready-built factories continues to increase due to the recovery of industrial production, and at the same time, many large corporations and suppliers are accelerating their shifting to Vietnam.

Nonetheless, opportunities are not evenly distributed across segments. The market is showing mixed developments between the factory segment in synchronous industrial parks and individual factories outside. In the suburban areas of industrial parks, the rental and selling prices of small factories scattered in residential areas are more and more decreasing, but the absorption rate is decreasing. This is most evident in the suburban areas of Ho Chi Minh City and the provinces like Dong Nai, Binh Duong, Ba Ria-Vung Tau, Long An, etc.

According to the analysis of market research units, most small factories outside industrial parks are not legally guaranteed and are built on agricultural land with unsuitable areas and insufficient infrastructure, etc., causing difficulties in attracting investment. Especially, after incidents related to fires and explosions, labor safety, in addition to legal factors, factory projects must also comply with many standards on land, planning, fire safety, environment, and construction.

On the contrary, the factories for rent in industrial parks are increasing in their attraction since they bring many benefits to investors, ensure legal factors and meet standards on land, fire prevention, environment, construction and have suitable planning and sufficient industrial infrastructure.

The investor of Long Thanh Industrial Park (Dong Nai) said that most small and medium-sized manufacturers choose to rent ready-built factories in industrial parks to quickly start production and shorten the time to bring products to market; saving time and costs. In addition, customers may flexibly choose the rental term, enjoy preferential policies as well as be provided with comprehensive legal consulting and support services.

Factory for rent of Sonadezi system in Chau Duc Industrial Park

Based on practical experience, Sonadezi said: “Customers often choose the factories with convenient locations for road, waterway and air traffic connections; green infrastructure with full services and utilities. Moreover, the investors prioritize choosing reputable and professional suppliers providing appropriate solutions and meeting the criteria for design, construction, and factory care and maintenance services.”

The increasing demand for factory rental has promoted new supply in industrial parks in both the North and South of Vietnam with many factory projects increasing their absorption rates quite quickly, for example, the factory rental system in industrial parks in Dong Nai and Ba Ria – Vung Tau of Sonadezi Corporation has achieved an occupancy rate of about 94%, with accumulated investment capital reaching nearly 300 million USD.

Meeting the specific needs of each customer

It is expected that Vietnam will have about 6,000,000 m² of warehouses put into operation from now until 2027. In Dong Nai alone, where Long Thanh Airport is located, there will be an additional supply of warehouses of more than 1,600,000 m², according to the estimates of Cushman & Wakefield.

Currently, not only domestic businesses but also many FDI ones are accelerating in the race to expand their factory market share. To increase competitive advantage and welcome new capital flows moving into Vietnam, many industrial park infrastructure investors have had innovative strategies and diversified products.

Ba Ria-Vung Tau Province Industrial Parks Authority informed that the industrial factory rental market in the province has recorded a new supply trend with improved standards, many types of factories and forms of supply such as leasing and transfer. In Chau Duc Industrial Park and Phu My Industrial Parks 1, 2, and 3, clusters of relatively large-scale factories for rent are forming, attracting many projects with high technology and supporting industries, etc.

Sonadezi provides factories according to the specific needs of each customer (in the photo: Factory built under the specific industry of Samtec Vietnam)

The leaders of Sonadezi said that customers’ demand for factory products is increasingly diverse and requires higher criteria. In addition to the group of customers renting land to build their own factories or renting ready-built standard factories, many customers order to build factories according to their requirements, especially those built according to the specific industry and field of operation.

To satisfy these needs, Sonadezi is developing a diverse supply source, increasing construction solutions according to the specific requirements of each customer, meeting construction standards, fire safety and optimal technical criteria for many industrial sectors.

With more than 1,000 hectares of commercial land that can be put into immediate exploitation, Sonadezi and its member units are promoting the development of a system of standard factories in key locations, in parallel with leasing industrial land. Up to now, Sonadezi has built and put into operation more than 100 factories in many industrial parks like Long Thanh, Chau Duc, Thanh Phu, Giang Dien, Xuan Loc and Nhon Trach 2.

According to Dong Nai Industrial Parks Authority, after the announcement of Provincial Planning for the period 2021-2030, with a vision to 2050 and investment promotion activities, Dong Nai continues to welcome many more investment projects. Therefore, the demand for industrial land and factory rental will increase sharply, but the level of competition will increase. In addition to expanding scale, industrial park infrastructure businesses are required to continuously improve quality, apply international green building criteria and increase integrated services to meet market demand, and anticipate new generation FDI capital flows.