Vietnam's industry is facing many difficulties during the time when the economy is falling into recession after the Covid 19 pandemic. Not only Vietnam but also the world industry is in a state of crisis. According to CNBC, the World Bank is sharply cutting its 2023 growth forecast and issuing global warnings that it is “very close” to a recession. In addition, global manufacturing sectors have struggled as companies cut capacity amid declining demand.
Industrial production in January 2023 is falling sharply because consumer demand is decreasing, causing a shortage of orders for businesses to operate. This left more than 6,000 workers unemployed as factories were forced to shut down due to running out of orders.
Although the recent information and developments are negative, there are also bright spots that are considered as opportunities for the industrial real estate market in Vietnam. Vietnam remains the top investment destination in the APAC region as it benefits from its position as a “China +1” destination according to CBRE's Investor Interiors Survey 2022 . Many foreign businesses want to expand and penetrate the Vietnamese market.
Seeing this development opportunity, the government pledged to step up investment and upgrade infrastructure in both the North and the South. Therefore, it is forecasted that 2023 to 2025 will be the period when industrial land rents will continue to increase thanks to stable rental demand. The prices of warehouses and ready-built factories in the forecast period will also increase slightly or remain the same.
In general, the secondary market in the tier 1 region is expected to increase sharply as land funds located in key areas gradually become scarce. In the North, industrial land in secondary markets is also on the rise thanks to the interest from manufacturers and developers of rental factories. Finally, the green industrial park will be a new change point promoting green industrial parks, renewable energy associated with the benefits of environmental protection.
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