Vietnam offers favorable conditions for foreign investors for many reasons, such as: strategic location, sufficient staff with competitive labor costs and a relatively open environment.
A number of investment projects worth billions of dollars have been registered, demonstrating continued growth in the economy and industrial real estate sector.
Nikkei Asia quoted Phil Davis of Amazon Web Services as saying that Amazon plans to expand its data center network in Asia-Pacific by building local data centers.
Amazon has announced it will build 10 local data centers in six countries, including Australia, India, New Zealand, the Philippines, Thailand and Vietnam. Amazon will spend billions of dollars to build the centers.
To this end, Lego signed an MOU (memorandum of understanding) for the construction of a new factory in Binh Duong province. The investment project with a total investment capital of more than $1 billion is expected to be implemented in the second half of 2022 and to become operational in 2024, creating 4,000 jobs.
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This is the sixth Lego factory in the world and the second in Asia, which is expected to help Lego expand its global supply chain, enabling it to respond flexibly and quickly to changes in consumption demand in each region.
Recently, Fuchs, a leading German supplier of lubricants, expanded its business by leasing a 20,000 square meter site in Phu My 3 Industrial Zone (IZ). Framas, Germany’s leading manufacturer of injection molding machines, has leased a 20,000 sqm turnkey facility at Nhon Trach 2 IZ in Dong Nai.
According to Savills, some large companies in the US and Europe are looking for opportunities to enter the Vietnamese market. The industrial real estate market is also seeing many data center and logistics projects with high-quality investments.
SLP CEO Jenkin Chiang said the Covid-19 pandemic has transformed the market, fueled the growth of e-commerce and increased demand for industrial real estate in both the short and long term. In recent years, the demand for ready-made workshops has increased sharply.
Statistics showed that Bac Ninh led the way in attracting investment in the first two months of the year, followed by Thai Nguyen, which raised $924 million in investment capital, accounting for 18.5 percent of total FDI. (FDI) of the whole country. The most notable project is the additional investment of $920 million registered by Samsung Electro-Mechanics Vietnam, which is part of the Samsung Group in South Korea.
The additional investment has helped increase the total investment capital in Yen Binh IZ in Pho Yen city in Thai Nguyen province to $2.27 billion, or VND 52 trillion.
The appeal of Vietnam
Matthew Powell, director of Savills Hanoi, said major companies’ choice of Vietnam as a strategic destination plays an important role in fostering the growth of foreign direct investment and helping to boost Vietnam’s prestige in the international arena.
Lego now only has five factories around the world.
The expert explained the huge foreign direct investment and said that the price of industrial land is reasonable while there are many prestigious real estate developers.
The other reasons include population, labor costs, transportation network and accessibility of international ports and airports for import and export of finished products.
In addition, good planning from central to local level contributes to the attractiveness of Vietnam. Many companies have entered the market because of tax preferences in key economic zones. Enterprises are expanding and diversifying their markets to reduce dependence on China.
Vietnam is also emerging thanks to political stability, open investment opportunities, the satisfaction of business needs and strong support from local authorities.
“There are still problems in the administrative procedures, but major improvements have been made. In general, there are many factors that attract investors to Vietnam rather than China, India and Thailand,” he said.
As for investment in industrial real estate, the market has been very vibrant over the past three years with investments worth billions of dollars. At the end of December 2021, Gaw NP Industrial started the turnkey factory (RBF) with an area of 16 hectares in the BNP YenBinh2 Industrial Center.
Logos and Manulife Investment Management have formed a joint venture to purchase a modern logistics factory, built to order, with a total area of 116,000 sqm and an investment value of $80 million. CapitaLand Development has signed an MOU with Bac Giang Province on the development of an IZ, logistics and urban area. SLP has started construction of SLP Park in Long An.
Together with GLP, its strategic partner, SLP has announced the creation of a $1.1 billion investment capacity fund, one of the largest logistics development funds in Southeast Asia.
By Duy Anh @ vietnamnet
