Why is Vietnam's industrial real estate in the North developing more than the South?
- duyenthu.vietdata
- Dec 16, 2024
- 3 min read
Currently, the North is leading in attracting FDI and high-value manufacturing industries. According to experts, the main reason is the advantage in infrastructure compared to the South.
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In the first 9 months of 2024, Vietnam attracted 24.8 billion USD in committed FDI capital with 2,492 newly registered projects, totaling 13.6 billion USD.
Bac Ninh leads with 18% of total FDI capital, equivalent to 4.5 billion USD; followed by Ho Chi Minh City with 8%; Quang Ninh with 7%. The Foreign Investment Agency (FIA) under the Ministry of Planning and Investment forecasts that Vietnam will attract 39 - 40 billion USD in FDI by the end of 2024.
In terms of FDI attraction sectors, manufacturing and processing currently account for 63% of total capital, reaching 15.6 billion USD. Total newly registered capital in this sector reached 9 billion USD, of which the North accounts for 59%, equivalent to 5.3 billion USD.
According to Mr. Thomas Rooney, Senior Manager, Savills Hanoi Industrial Services, while the Southern provinces mainly attract industrial real estate tenants from processing industries, such as rubber, plastics, food and beverage, the Northern region has become the center of high-value-added industries, including automobiles, machinery and equipment, electronics and solar energy production.
In the goal of positioning Vietnam as a high-tech manufacturing center, the North is assessed to have greater resilience, becoming an attractive destination for investors in the coming time.
According to Savills statistics, the manufacturing sector accounts for 48% of the total newly registered FDI capital in the Northern region, focusing mainly on high-value industries such as automobiles and electronics. The North also attracts 7/10 leading corporations in the semiconductor sector. Bac Ninh leads with the presence of 4 large corporations, including Samsung Electronics, Amkor Technology, Hanmi Semiconductor and Victory Giang.
In the energy sector, in the first 9 months of 2024, there were 5 investment projects in the North, notably the 454 million USD project in Thai Nguyen by Trina Solar Cell. The remaining 4 projects are from major investors, including Sunergy Wafer, VDL International B.V, Linton Crystal and Silver Paste PTE.
Explaining the reason, Mr. Thomas said that the main difference between the Northern and Southern markets lies in the industrial focus and infrastructure advantages. The Northern Key Economic Zone includes Bac Ninh and Hai Phong, with a strategic location close to China and the North Asian market, which is beneficial for industries focusing on manufacturing.
The Northern region accounts for about 61% of the total length of Vietnam's highways and includes the country's longest and most modern highway, the Lao Cai - Quang Ninh route (about 600 km). Port systems in Hai Phong, Quang Ninh, Thai Binh and Nam Dinh, along with Noi Bai and Cat Bi international airports, facilitate connectivity across the region.
Many regional highways connect industrial parks with Hanoi and the Chinese border, thereby increasing the attractiveness of the North to foreign investors. In the near future, the North will have two more key infrastructure projects, the Ring Road 4 and the Hoa Binh - Moc Chau Expressway.
In addition, the northern provinces have advantages in abundant land funds and reasonable rental prices. In the first half of 2024, the Northern Economic Zone will provide 12,985 hectares of industrial land in 73 industrial parks, up 12% year-on-year thanks to the expansion of industrial parks in Hai Phong, Hung Yen and Hai Duong.
(Theo doanhnhanvn.vn)
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