SUMMARY OF INDUSTRIAL REAL ESTATE QUARTER I / 2020 VIETNAM

Due to the outbreak of the COVID-19 epidemic, the total demand for land lease in industrial parks will continue to increase in 2020

Based on the new report of the Department of Economic Zone Management (Ministry of Planning and Investment - Vietnam), by the end of March 2020, Vietnam had 335 industrial parks (IZs) established with a total area of natural land reaches about 97.8 thousand hectares; in which industrial land area is about 66.1 thousand hectares.

• Vietnam has 260 industrial parks which have been put into operation with the occupancy rate of about 76%, of which 75 industrial parks are under construction with a total area of about 29.2 thousand ha.

• 17 coastal economic zones have been established with a total land area and water surface of more than 845 thousand hectares, and the leased land area in functional areas in the Economic Zone reaches over 40 thousand hectares.

• There are 37 industrial parks located in the Economic Zone with a total area of about 15.6 thousand ha.

• In particular, 20 industrial parks are operating with a total area of about 8.5 thousand hectares and 19 industrial parks are under construction with a total area of about 7.1 thousand hectares.

• At present, Vietnam has about 3.7 million employees working in industrial parks and economic zones, and 229/260 industrial parks are operating with concentrated waste water treatment works (90%).

Due to the outbreak of the COVID-19 epidemic, the industrial real estate market was inevitably affected, causing concerns about labor shortages and supply chain disruptions in the manufacturing sector in the quarter. I / 2020. The outbreak of the Covid -19 epidemic had hit the industrial real estate sector as the market saw a drop in demand from Chinese, Korean and Japanese tenants.

According to Kland, the total demand for land lease in industrial parks will continue to increase in 2020, especially in the third and fourth quarters as foreign investment capital into Vietnam is increasing sharply with the wave of relocating production facilities. exports from China to Southeast Asian countries to diversify production facilities to other regions and minimize risks when investing in China.

The fact that many infrastructure companies are willing to invest in building and leasing ready-built factories may bring more profits to industrial park development companies in the next few years.

It can be said that the Covid -19 epidemic does not affect much to the development of the industrial real estate market - which is growing stably and is the first strategy, long-term private production of foreign businesses when entering Vietnam.

Kland provides legal advice on Vietnam's industrial real estate investment.