Limitless prospects
The industrial property market has seen major growth in recent times and interest is expected to continue unabated into the future.
Thailand’s Amata Corporation revealed plans last month to join forces with Vietnam’s Tuan Chau group to develop an urban area and hi-tech project worth $1.6 billion in northern Quang Ninh Province. The joint venture, of which Amata holds 70 percent, will build Amata City Ha Long on 5,789 ha of Land. It expects to spend $60 million on industrial park (IP) in the first phase with the remainder to be poured in over nine subsequent phases from now to 2030. The complex targets to woo 1,000 projects and attract investment in the vicinity of $5 billion and create some 300,000 jobs once has been emphasized opened.
Amata has strategies to promote their investment in northern Vietnam to “welcome” factories of Japanese investors expected to relocate to the region in the coming years to take advantage of Vietnam’s low labor costs and then supply products to the Chinese market. The corporation’ move justifies talk of the potential of the industrial property segment in Vietnam, which has been emphasized by insiders recently.
The hi-tech industry is hardly new to Viatnam, with LG, Nokia, Intel, and Samsung all heavily committing to locations throughout the country. It has, however, seen a significant increase in interest in recent times. The additional investment by Samsung in Vietnam’s south bolsters the country’s claims to be real competitor in the region.
When these groups decide on Vietnam there is an increase in interest from manufactures within their supply chain, who consider strategic decisions to locate nearby these large manufactures, according to Mr. Timothy Horton, General Manager of real estate advisers Cushman & Wakefield Vietnam. For a lot of these groups, Vietnam has always on the radar but at the scale of manufacturing has not been in place in comparison to countries such as China, Indian, Philippines, the country always been the destination on the back burner. It has been exciting to speak to a lot of new entrants such as component manufactures as they start to really investigate the opportunities and advantages in locating their business here in Vietnam, Mr. Horton said “The government has been very proactive in attracting quality foreign investment”.
Vietnam was unveiled as the world’s leading outsourcing location for the first time in recent research by Cushman & Wakefield. Costs, risks, and operating condition were analyzed in the report to provide an insight into which markets are particularly attractive in the current global environment. With one of the highest growth rates in outsourcing, Vietnam has established its presence as an alternative destination for low-cost off-shoring services, rising from fifth place in last year’s index. The government has put in place polices to promote the country as an outsourcing destination, with the services segment expected to expand rapidly.
[Source : Vietnam Economics Times No.256 June 2015]
