Industrial property market witnesses new M&A deals

Song Khoai Industrial Park with an area of ​​714 hectares is one of the key projects of Quang Ninh.

Specifically, 2021 has witnessed new M&A deals and improvement in industrial land supply. The largest manufacturing projects in H1/2021 came from Hong Kong and Singaporean businesses that targeted Quang Ninh and Bac Giang provinces.

Drop in manufacturing FDI

By the 20th of June 2021, Vietnam attracted US$15.27 billion in total registered FDI. The manufacturing and processing sector attracted a total of US$6.97 (45% of total inflows), with 273 new projects investing US$3.09 billion and 286 existing projects raising capital US$3.38 billion.

Year-on-Year, total registered manufacturing FDI is down to US$6.97 billion from US$8 billion in H1/2020, and newly registered manufacturing capital is down to US$3.09 billion from US$3.57 billion. However, H1/2021 existing manufacturing capital at US$3.38 billion remained higher than last year’s figure of US$3.23 billion.

By region, the North received the majority of newly registered manufacturing investments with a substantial US$1.97 billion, representing a 64% share. The South followed with US$728 million (23%), while the Central region attracted US$395 million (13%). In terms of provinces, Bac Giang received the highest amount of newly registered manufacturing capital with US$589 million, closely followed by Quang Ninh with US$569 million, and Bac Ninh with US$222 million. Representing the South, Binh Duong came in fourth place with US$208 million.

By Nationality, Hong Kong invested the highest amount of manufacturing FDI in the first half of the year with over US$852 million, representing a 27% share. Singapore was in second place with US$655 (21%), followed by China with US$549 (18%), and South Korea with US$330 million (11%).

In terms of investors, the largest manufacturing projects in 1H 2021 were from Jinko Solar and Fukang Technology from Hong Kong and Singapore investing US$498 million and US$270 million in Quang Ninh and Bac Giang, respectively. Interestingly, none of the top manufacturing and processing investments in 6M/2021 were in the South.

Rental developers and M&As

Regarding M&A activities, the year 2021 witnessed new M&A deals. Boustead Projects singed an options agreement for the proposed acquisition of 49% interest in KTG & Boustead Industrial Logistics Joint Stock Company. If successful, the partnership will consist of 13 real estate seed assets (10 of which belong to KTG and 3 belonging to Boustead Projects) amounting to US$141 million in gross asset value covering about 840,000 m2 of land area and about 550,000 m2 of gross leasable area.”

ESR Cayman Limited, the largest Asia-Pacific-focused logistics real estate platform, and BW Industrial Development JSC (BW), the leading logistics and industrial real estate developer and operator in Vietnam, have entered into a joint venture to develop 240,000 m2 in My Phuoc 4 Industrial Park near Ho Chi Minh City. The partnership marks ESR’s entry into Vietnam, expanding the group’s Asia-Pacific footprint in the high-growth Southeast Asia region.

Regarding new projects, Logos Property 81,000 m2 project in VSIP Bac Ninh 1 Logistics Park is expected to be live in Q4/2021. New player in the market, KCN Vietnam Group JSC, acquired a significant 250 hectares land bank with an investment of $300 million. They aim to develop premium, sustainable factories and warehouses for rent in Vietnam with a national portfolio spanning across Bac Giang, Hai Phong, Hai Duong, Dong Nai and Long An.

Integrated industrial property to emerge

In Vietnam, in the long term, a high-quality industrial park will have growth advantages in a vibrant market. The integration of housing elements in industrial parks should not only stop at a residence for workers, but also provide facilities for housing, retail, education, and entertainment, to serve the diverse needs of workers, professionals, and tenants.

With the above features, the industrial park project will create an investment attraction, especially for businesses operating in the high-value industrial sector.

Therefore, the adjustment in the policy is expected to bring about positive changes, which can be considered as one of the initiatives to help the Vietnamese industry have many projects to catch up with the investment trend in the market.