HCMC chairman Nguyen Thanh Phong recently called a meeting with industrial real estate developers to learn about the difficulties they are facing.
They told him that one of the challenges was the high cost of land which increased rents and made the market less attractive.
Nguyen Van Be, chairman of the HCMC Export Processing and Industrial Zones Authority, said the industrial real estate market has been almost frozen since the start of the last wave at the end of April, with prices not rising and few companies renting new land to expand.
In the southern industrial province of Long An, the number of industrial investments in the first five months fell by seven from the same period last year to 58.
Industry insiders said that in the past two months, demand for industrial land has fallen by 50 to 60 percent.
John Campbell, head of industrial real estate at real estate consultancy Savills Vietnam, said the growing number of Covid cases, particularly in HCMC, has contributed to the drop in demand as companies cannot visit the premises. to check them out because of social distancing.
But demand would pick up as it did after previous waves of Covid were contained.
Dozens of new industrial parks were approved in the first quarter, including five in the northern province of Bac Ninh, each costing hundreds of millions of dollars to develop.
In Long An, around 1,500 hectares of land are expected to be cleared for industrial purposes this year to attract foreign investment, especially in the textile and clothing, footwear and animal feed sectors.
Dong Nai plans to build three new industrial parks with a total area of nearly 6,500 ha.
Other localities that have received approvals for new industrial parks are Vinh Phuc and Hai Duong in the north, Quang Tri and Quang Nam in the central region and Vinh Long in the south.
Foreign investors remain interested in developing industrial land thanks to Vietnam’s success in containing Covid.
Several agreements were signed this year.
Singaporean real estate developer Boustead Projects paid US $ 6.9 million to acquire a 49% stake in Khai Toan Industrial to develop its property in Yen Phong Industrial Park.
ESR Cayman Limited, a major developer in the Asia-Pacific region, has partnered with local player BW to develop 240,000 square meters of land in the My Phuoc 4 industrial park in the southern province of Binh Duong.
At the end of the first quarter of this year, Vietnam had 370 industrial parks with 115,200 ha, according to the Ministry of Planning and Investment.