Hanoi (VNA) –Industrial real estate has been a bright spot in the market thanks to a largeamount of foreign investment inflows, great potential and high absorptioncapacity, according to experts.

Under theindustrial park (IP) planning, Vietnam has 563 IPs with a total areaof 210,900 hectares, including 361 outside and 37 inside economic zones, andeight in border economic areas.

Thomas Rooney, SeniorManager of Industrial Services at Savills Hanoi, said that Vietnam has lowereconomic risk than other emerging countries such as Myanmar, Bangladesh, Laos,Cambodia, and Malaysia.

At the same time, Vietnamhas great advantages in labour supply and export opportunities to China, alongwith stable domestic consuming power, he said.

However, the expertheld that although Vietnam is one of the countries that invest strongly ininfrastructure system at 5% of the GDP, it needs to pay greater attentionto expressway, deep-water port and service port projects. He advised Vietnam tomake more investment in human resources and infrastructure to increase theattractiveness of industrial property in the time to come.

Statistics from CBREVietnam showed that as of the first quarter of 2023, the accumulated supply of industrialland in tier-2 markets in both the north and the south reached more than 20,300hectares, of which more than 57% of the total supply was in the south. Bothregions recorded a positive absorption rate of new leasable space in 2022, inwhich the new leasable area of the north increased by 35% year on year, whilethe southern market recorded an average growth of 58% year on year.

Strong demand frommanufacturers as well as enhanced competitive advantage in the tier-2 marketshave supported the industry's recent activities in these markets. These areas arebeing offered for rent at more competitive rates than the tier-1 markets, whilethe available land reserve offers tenants more options.

At the same time, keyinfrastructure projects in both the north and the south have recently come intooperation, thus improving connectivity from provinces to major cities.

Thanh Pham, Associate Director of Research andConsulting Department at CBRE Vietnam, said that as some locations inindustrial zones in the tier-2 markets offer incentives on incometax and land rent reduction and exemption, the markets have attractedlarge-scale manufacturers and ready-built factory operators.

In the period from2022 to the first quarter of 2023, CBRE recorded large-scale transactions witha scale of 10 hectares or more in northern provinces such as Bac Giang, ThaiBinh, and Quang Ninh, mainly in the electronics and automobile sectors, shesaid./.