Industrial Market Report 2019

consultancy
INDUSTRIAL REPORT
Q3 | 2019
Our Professional Your Success www.tmsconsultancy.com.vn

CONTENTS
I. OVERVIEW..................................................................................................................................................................................................................... 2
1. VIETNAM TOOK PART IN SOME TRADE AGREEMENTS............................................................................................................ 3
2. VIETNAM ECONOMIC FACTORS................................................................................................................................................................ 2
3. LIST OF COMPANIES MOVED FROM CHINA TO VIETNAM.....................................................................................................4
4. LIST OF COMPANIES ARE MOVING FROM CHINA TO VIETNAM........................................................................................4
II. SOME FACTORS COMPARED TO OTHER COUNTRIES IN THE REGION........................................................................ 5
1. POPULATION.......................................................................................................................................................................................................... 5
2. AGE STRUCTURE.................................................................................................................................................................................................. 5
3. SALARY OF MANUFACTURE INDUSTRY (July 2019 & 2018)..................................................................................................... 5
4. GDP GROWTH RATE.......................................................................................................................................................................................... 5
5. GROWTH OF INDUSTRIAL PRODUCTION SEPTEMBER 2019............................................................................................... 5
6. BUSINESS ENVIRONMENT 2019................................................................................................................................................................6
7. AVERAGE FACTORY CONSTRUCTION COST 2018.........................................................................................................................6
8. PMI, 8/2019................................................................................................................................................................................................................6
III. VIETNAM....................................................................................................................................................................................................................7
1. FDI..................................................................................................................................................................................................................................7
2. GDP...............................................................................................................................................................................................................................7
3. PERFORMANCE OF EXPORT & IMPORT..............................................................................................................................................8
4. PERFORMANCE OF INDUSTRIAL PARKS & ECONOMICS ZONES.....................................................................................9
a. Overview..............................................................................................................................................................................................................9
b. Policy related to Industrial.....................................................................................................................................................................10
c. Wage (by zone) in Vietnam....................................................................................................................................................................12
d. Average Land Price and Occupancy of Zone in Vietnam, 2019.....................................................................................12
5. VIETNAM’ PMI, 2019...........................................................................................................................................................................................12
6. GROWTH OF INSDUSTRIAL PRODUCTION (IIP)...........................................................................................................................12
7. LIST OF PROJECTS ARE CALLING FOR INVESTMENT CAPITAL Q3/2019......................................................................13
8. LIST OF COMPANIES FOR READY-BUILT FACTORIES
AND BUILD-TO-SUIT INDUSTRIAL FACILITIES (RBF), Q3/2019............................................................................................13
9. PROSPECTS...........................................................................................................................................................................................................14
10. LIST OF INDUSTRIAL PARKS/ZONES IN VIETNAM, 2019..........................................................................................................13
a. Northern Region.................................................................................................................................................................................................14
b. Central Region......................................................................................................................................................................................................15
c. Southern Region.............................................................................................................................................................................15
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VIETNAM ECONOMIC FACTORS
Item Last Previous Reference Range Frequency
GDP Annual
Growth Rate (%)
7.31 6.73 Sep/19 3.12 : 8.48 Quarterly
Unemployment
Rate (%)
2.17 2.16 Sep/19 1.81 : 4.5 Quarterly
Inflation Rate (%) 1.98 2.26 Sep/19 -2.6 : 28.24 Monthly
Interest Rate (%) 6 6.25 Sep/19 4.8 : 15 Daily
Balance of
Trade (USD Million)
500 3430 Sep/19 -3888 : 3430 Monthly
Current
Account (USD
Million)
-107 1976 Jun/19 -10823 : 9471 Quarterly
Current Account to
GDP (%)
3 2.9 Dec/18 -12.7 : 6 Yearly
Government Debt
to GDP (%)
57.5 58.2 Dec/18 31.4 : 59.7 Yearly
Government
Budget (% of GDP)
-3.5 -3.5 Dec/18 -9.9 : 1.2 Yearly
Manufacturing
PMI
50.5 51.4 Sep/19 43.6 : 56.5 Monthly
Corporate Tax
Rate (%)
20 20 Dec/19 20 : 35 Yearly
Personal Income
Tax Rate (%)
35 35 Dec/18 35 : 40 Yearly
Source: Trading Economics
OVERVIEW
Opportunities and potential development of industrial real estate in Vietnam due to
trade tensions between China and the US have created a two-way impact. Firstly, it
is boosting the movement of companies from China to Vietnam. On the other hand,
this establishes the price of goods soar, which may reduce purchasing power in the
world market and bear on the Chinese export commodities. Besides, the Government
of Vietnam and many local authorities are also offering special incentives for foreign
businesses to locate and invest in industrial parks and export processing zones with a
specific plan: visa exemption for foreign experts who will work in industrial parks and
export processing zones; land tax incentives; 1-door custom tariff will be ready. At the
same time, the participation of Vietnam to 18 free trade agreements (FTAs) also help
improve the business environment for domestic and foreign companies.
Besides, because of its strategic location, locating between China and Singapore
with width is 3260 km of coastline, bordering the South China Sea, Vietnam is one of
the world’s key maritime trade areas. Approximately 40% of cargo transported from
Indian Ocean to the Pacific Ocean will pass through this South China Sea to China,
Japan, South Korea and the United States. Moreover, Vietnam experiences a young
workforce and low labor costs, a stable political environment. It is one of the fastest
growth countries in the region as well as the world. All of these factors show that the
investment environment is quite attractive for all foreign investors, who are going to
invest in Vietnam.
VIETNAM TOOK PART IN SOME TRADE AGREEMENTS
No. Name of Organization or Agreement Date
1 WTO 11/01/2007
2 ASEAN 28/07/1995
3 FTA (Vietnam – Korea) 20/12/2015
4 APEC 14/11/1998
5 TPP 04/02/2016
6
RCEP (Regional Comprehensive
Economic Partnership)
Ongoing and will be taking part in
2020
7 EVFTA Effective Expectation in 2020
8 CPTPP 30/12/2018
Source: TMS Consultancy, Research
Industrial Report | Q3 2019Industrial Report | Q3 2019
2

No. Companies Name Nationality
Located in
China
New Location
in Vietnam
Specialties in Vietnam
1 Yokowo Japanese Quangdong Ha Nam Automotive annanten components
2
Techtronic
Industry (TTI)
Hong Kong Quangdong Binh Duong
Hoover Vacuum Cleaners
and Miwaukee power tools
3 Lever Style Hong Kong Shenzten
Ho Chi Minh
City and Ha
Noi
Garment manufacturing: shirts,
blouses, suits, jackets, pants, skirts
4 Huafu Fashion Chinese Zhe Jang Long An Cotton, yarn, fabrics and clothing
5
Hanwa Aero
Engine
South Korean
Datong,
Qinghai
province
Hoa Lac (Ha
Noi)
Aero engine manufacturing
6 Luthai Textile Taiwanese Shangdong Tay Ninh Yarn dyed fabric, garment and shirt
7
Zhejiang Halide
New Material
Chinese Haining TBD Polyester production
8
Guizhou Advanced
Type Investment
Chinese Gulyang Tien Giang Tire manufacturing
9
Cooper Tire &
Rubber Company
Chinese TBD
Near Ho Chi
Minh City
Automobile and truck tires
10
Hung Hing
Printing
Hong Kong TBD Ha Noi Printing and Packaging
11 Man Wah Holdings Chinese TBD Binh Duong Furniture Maker
12 GoerTek Chinese Weifang Que Vo IP Manufacturer of earbuds of AirPods
13 TCL Chinese TBD Binh Duong TV Production
Source: https://vinacapital-cdn.azureedge.net/wp-content/uploads/2019/07
No. Companies Name Nationality
Located in
China
New Location
in Vietnam
Specialties in Vietnam
1 HL Corp Chinese Shenzten TBD Bicycle parts manufacturing
2 Foxconn Taiwanese Shenzten
Bac Giang,
Quang Ninh
TV Hardware manufacturing
3 Brooks Running American
Zhe Jang,
Quangdong
Ha Noi, Ho Chi
Minh
High performance men’s
and women’s running shoes,
clothing and assessories
4 Lenovo Chinese
Chengdu,
Heifei
Nam Sơn Hap
Linh IP
Computer hardware
manufacturing
5 Vera Bradley American TBD TBD Handgab and Luggage
6
Hangzhou Great
Star Industrial
Chinese Hangzhou TBD
Manufacture and distribution
of hardware and tools
7
Pedego Electric
Bikes
American TBD
Long An, Binh
Duong
Electronic bicycles
8 Sharp Japanese TBD TBD PC Production
Source: https://vinacapital-cdn.azureedge.net/wp-content/uploads/2019/07
SOME FACTORS COMPARED TO OTHER
COUNTRIES IN THE REGION
LIST OF COMPANIES MOVED FROM CHINA TO VIETNAM
LIST OF COMPANIES ARE MOVING FROM CHINA TO VIETNAM
POPULATION
The population of some countries in the region is
shown on the below chart that TMS Consultancy is
gathered, China’s population is the highest among
other countries and higher than Vietnam about 14
times
Source: Focus Economics
AGE STRUCTURE
Source: CIA World Factbook
Based on the above age structure chart, it shows that
Singapore’s working age is higher than other countries
in the region and Vietnam is the second highest. Many
developing countries in Southeast Asia are facing the
population transition, which is transitioning from a
country with high fertility and mortality in a country
with low fertility and mortality populations, and
Vietnam is not an exception. Hence, this will make the
significant change in the age and gender structure
of Vietnam’s population. Moreover, this will change
the population structure and the interaction with
the economic life cycle as well as the impact on the
economic growth. Average capita income based on:
• Average income in working age population.
• The proportion of the population in working age
(support rate).
SALARY OF MANUFACTURE INDUSTRY
(July 2019 & 2018)
GDP GROWTH RATE
Vietnam’s GDP is quietly higher than other countries
in the region in 2018 based on the source of ADB, 2019.
However, Vietnam’s GDP is 7.31% in September 2019
with the source of Trading Economics.
Source: ADB, 2019
GROWTH OF INDUSTRIAL PRODUCTION
SEPTEMBER 2019
Vietnam industrial production growth is higher than
other countries in the region. However, Vietnam
industrial production growth in September 2019 is
lower compared to August 2019 due to the influence of
the world economy. So the international organizations
have been continuously adjusting their forecasts in a
less positive trend. In addition, the IMF forecasts that
the growth rate will be only at 3.3% in 2019
4 5

BUSINESS ENVIRONMENT, 2019
Source: Worldbank
According to the World Bank’s assessment, Vietnam’s
scores and rankings in the Business Environment
Rankings continued to improve from 2014 to 2019 as
the above chart. Vietnam has been ranked 70 out of
190 economies with the scores of 69.8 points, which is
higher than 2018. However, the country moved down
one place from 69th to 70th in ranking.
Vietnam’s business environment is 5 tops of ASEAN as
below chart:
AVERAGE FACTORY CONSTRUCTION COST
2018
Source: Tuner & Townsend, International Construction
Market Survey, 2018
Based on the above chart, Vietnam’s construction cost
of factory is the lowest compared to other countries
in the region, average construction cost is under US$
500/sqm and also the average construction cost for
high-tech factory/laboratory is the lowest compared
to other countries in the region.
PMI AUGUST 2019
FDI
Vietnam’s FDI from 2014 to 2018 is as below:
Source: GOS, Vietnam
Currently, Vietnam attracts 2,759 new licensing
projects with registered capital of US$10.9 billion, an
increase of 26.4% in projects and decrease of 22.3%
in registered capital compared to the same period in
2018.
The GSO has just announced that from the beginning
of the year to 2019, the total new registered capital,
adjustments and contributed capital to buy shares
of foreign investors reaching US$26.16 billion, up to
3.1% over the same period 2018. Hence, FDI made
estimated at US$14.2 billion, up to 7.3% y-o-y within 9
months of 2019.
In addition, there were 1,037 licensed projects from the
years before the registration of capital adjustments
with an increased capital of 4.7 billion and decreased
of 13.6% Y-o-Y.
In September 2019, for FDI and investment, Japan and
Korea are the highest investing countries in Vietnam
compared to other countries.
GDP
Vietnam’ growth rate of GDP Q3/2019 is higher than
other years (from Q3/2015 to Q3/2018) and Vietnam’
GDP has been stable at 7%/year is shown in 2018 &
2019. Based on this data is synthesized by our TMS, we
can expect Vietnam’s GDP is about 6.9% of Q4/2019.
Besides, Vietnam GDP Structure by Labors of sectors
from 2009 to Q3/2019 is shown as below:
7
VIETNAM
6

PERFORMANCE OF EXPORT &
IMPORT
According to trade statistics of Vietnam
Customs, in August 2019, a 5.3% upturn in total
external merchandise turnover of Vietnam
was recorded on a month-on-month basis.
Exports went up 12.6 %, to US$ 25.89 billion
and imports shrunk 2.1%, to US$ 22.45 billion
as compared to the result of July 2019. As a
result, there was a US$3.44 billion surplus in
Vietnam’s trade balance in this month.
In the first 8 months of 2019, Vietnam’s trade-
in-goods totaled US$337.22 billion in value
terms, 8.1% above the corresponding period
of last year. As compared to the result of the
year earlier, total merchandise export value
rose 8.1%, to US$ 171.29 billion and the total
merchandise import value grew up 8.0% in
US$ 165.92 billion. Accordingly, Vietnam’s
trade balance in this period was in the surplus
of US$ 5.37 million
US: The first 8 months of 2019, trade - in -
goods between Vietnam and US reached
$62.27 billion, up to 21.1% over the same period
in 2018.
EU: The first 8 months of 2019, trade – in –
goods between Vietnam and EU reached $
44.05 billion, up to 4.1% over the same period
in 2018.
ASIA: Import and export goods between Viet-
nam and Asia continues to occupy the high-
est rate (70.4%) in total import and export
turnover of the country. Import and export
value in 8 months of 2019 reached $219.7 bil-
lion, up to 6% over the same period in 2018, in
which the export value is 86.78 billion, up to
2.8% and import value is 132.92 billion USD, up
to 8.2%
Turnover, growth of exports, imports and trade balance in the
first 8 months, period 2011-2019
Source: Custom, Vietnam
Market
Export Import
Value
(Bil USD)
Annual
Change
2018 (%)
Share
(%)
Value
(Bil USD)
Annual
Change
2018 (%)
Share
(%)
Asia 86,78 2,8 50,7 132,92 8,2 80,1
ASEAN 17,14 3,7 10,0 21,34 3,4 12,9
China 23,89 -2,0 13,9 49,00 17,7 29,5
Japan 13,33 9,3 7,8 12,40 0,7 7,5
Republic
of Korea
12,85 7,7 7,5 31,20 0,2 18,8
EU 31,86 3,0 18,6 12,19 6,9 7,3
EU (28) 27,62 -0,6 16,1 9,78 10,7 5,9
Oceania 2,91 -9,1 1,7 3,52 26,0 2,1
America 47,64 25,6 27,8 14,63 8,4 8,8
US 39,26 27,5 22,9 9,44 9,0 5,7
Africa 2,11 5,9 1,2 2,68 -11,6 1,6
Total 171,30 8,1 100,0 165,92 8,0 100,0
Source: Custom, Vietnam
Exports, imports’ total value and growth rate of Vietnam by
Continent/ Market in the first 8 months of 2019
PERFORMANCE OF INDUSTRIAL
PARKS & ECONOMICS ZONES
Overview
Supply
According to Department of Planning and
Investment, by the end of June 2019, there
were 326 industrial parks established by
natural land area reaching approximately 95
thousand hectares, of which industrial land
area reached nearly 65,6 thousand hectares,
accounting for 68,7% of the total nature land
area.
In 326 established IPs, there are 251 IPs in
operation with a total area of natural land
nearly 68 thousand hectares and 75 IPs are in
the stage of compensation for site clearance
and construction, with a total nature land
area over 25 thousand hectares.
Investment
By the end of 2018, industrial parks and
economic zones have registered to invest
about 560 foreign investment projects with
a total registered investment capital of over
US$ 5.3 billion and increased capital for nearly
500 projects with total investment capital
increased by more than US$ 3 billion. In
particular, in 2018, the total foreign investment
capital into IPs and EZs increased by about
US$ 8.3 billion.
Occupancy
The occupancy rate of operating IPs at over
74%.
8 9

Policy related to Industrial
(1) On 22 May 2018, Decree 82/2018/ND-CP defined
EIP for the purposes of Vietnamese laws and
government policies.
Article 2 states: Eco-industrial park means an
industrial park in which enterprises get involved in
cleaner production, make effective use of natural
resources and enter into manufacturing cooperation
and affiliation in order to tighten industrial symbiosis
to promote economic, environmental and social
efficiency in these enterprises.
Decree 82/2018/ND-CP requires EIPs to:
(i) comply with the laws on production and business,
environmental protection and labor
(ii) provide adequate essential infrastructure services
(electricity, water, information, fire prevention and
fighting...) and related services in the industrial park in
accordance with the laws
(iii) ensure that at least 90% of enterprises are aware
of efficient use of resources and cleaner production;
at least 20% of enterprises apply solutions to efficient
use of resources and cleaner production, improved
management methods and production technologies
to reduce waste, pollutants and reuse wastes and
scrap;
(iv) ensure that at least 25% of the park land area is used
for greenery, traffic, and shared service infrastructure
(v) ensure at least one industrial symbiosis is effected
and that at least 10% of businesses plan to join
industrial symbiosis
(vi) have solutions to ensure housing and social,
cultural and sports facilities for workers working in
industrial zones
(vii) have coordinated mechanism to monitor the input
and output of industrial zones on the use of energy,
water, essential production materials, hazardous
chemical management, and submit annual reports.
To develop an EIP, the state encourages
infrastructure investors through investment
incentives, applied by area and by industry:
 Incentives according to investment areas
The construction of infrastructure for an industrial park
in difficult areas is regulated in Article 18, Article 20
and Article 27 of the Decree 118/2015/ND-CP, guiding
the implementation of investment law as follows:
In addition, according to Decree 45/2012/ND-CP on
industrial promotion, establishments operating in the
industrial park applying cleaner production will be
entitled to financial support.
 Private investment incentives for enterprises in
the EIP
In order to encourage enterprises to participate in the
development of the EIP model, Decree 82/2018/ND-
CP also stipulates specific incentives for enterprises,
including preferential loans:
Article 43- Preferences for enterprises in EIPs
3. Enterprises developing infrastructure of eco-
industrial parks and eco-enterprises shall be given
priority in borrowing preferential loans from the Viet
Nam Environment Protection Fund, the Viet Nam
Development Bank and funds, financial institutions,
domestic and international donators to construct
technical infrastructure of industrial parks, implement
cleaner production methods, efficiently use resources
and industrial symbiosis solutions.
 Preferential policies on taxes and charges
In addition to the above investment incentives on
industrial park infrastructure, enterprises, including
infrastructure enterprises, also enjoy tax breaks and
fees:
- Corporate income tax: Enterprises are exempted
from corporate income tax for two years and a 50%
reduction of payable tax for four subsequent years on
incomes from new investment projects in IPs located
in geographical areas subject to poor socio-economic
conditions (Item 3, Article 16, Decree 218/2013/ND-CP)
- Personal income tax: Individuals (residents and non-
residents) working in industrial parks receive a 50%
reduction in personal income tax. (Circular 128/2014/
TT-BTC)
- Value added tax: Business establishments which pay
value-added tax according to the tax credit method
are entitled to input value added tax credit as follows:
Input value-added tax on goods or services used for
the production or trading of goods or services subject
to value-added tax may be wholly credited, including
input value-added tax that is not be compensated
of the damaged goods subject to value-added tax
and input value-added tax of goods and services for
forming fixed assets such as canteens, rest houses,
dressing rooms, garage, restrooms, water basins
serving employees in zones of production and business
and dwelling houses, health station in industrial parks
(Decree 209/2013/ND-CP).
- Land rental fee and land use fee: The regulations
relating directly to land leasing, land rental and land
use fees in industrial parks are also mentioned in other
documents:
• Infrastructure investors are exempt from land rent for
land used for the construction of infrastructure used
in the industrial park, industrial clusters, and export
processing zones (Land Law 2013).
• Investment projects on construction and trading
of industrial park infrastructure are exempted from
land rent at district level (Decree 46/2014/ND-CP).
In administrative divisions of rural districts facing
extremely difficult socio-economic conditions, these
investors shall be exempt from land rent for the whole
lease term (Decree 135/2016/ND-CP).
Source: UNIDO. Org
Article 18- Support for investment in the construction
of infrastructures in IPs and export processing zones
1. The scope, subjects, principles, criteria, limits of
investment assistance from central government
budget for construction of infrastructure of industrial
parks and export-processing zones in disadvantaged
areas or extremely disadvantaged areas shall comply
with the applicable Industrial Park Infrastructure
Investment Target Program.
Article 20- Investment in technical infrastructures of
IPs and export processing zones
2. With regard to a disadvantaged area, depending
on its conditions, the People’s Committee of the
province shall request the Prime Minister to establish
or appoint a revenue-earning public service agency
as an investor in the project for construction and
operation of technical infrastructure or the industrial
park or export-processing zone.
Article 27- Assurance of implementation of investment
projects
6. The investor shall receive a deposit reduction in
the following cases: a) 25% reduction of deposit
for investment projects in business lines eligible
for investment incentives; investment projects in
disadvantaged areas, investment projects in industrial
parks and export processing zones, including projects
for construction and operation of infrastructure in
industrial parks and export-processing zones
 Investment incentives
Incentives can be found in Decree 32/2017/ND-CP on
investment credits of the state and in Decree 45/2012/
ND-CP on industrial extension:
- According to Decree 32/2017/ND-CP: for projects on
the list of investment credit loans, including:
• Investment projects on the construction of
wastewater and garbage disposal facilities in urban
centers, industrial parks, export processing zones,
economic zones, hi-tech parks, hospitals and industrial
clusters and craft villages; and
• Infrastructure investment projects in industrial parks,
exporting processing zones and hi-tech parks
• The investor will be entitled to a preferential loan,
with the maximum lending amount for each project
equal to 70% of the total investment capital (excluding
working capital), and the maximum loan term, usually,
no longer than 12 years.
10

Wage (by zone) in Vietnam
Source: Legal Library
Average Land Price and Occupancy of Zone in
Vietnam, 2019
GROWTH OF INSDUSTRIAL PRODUCTION (IIP)
Industrial production rose 10.2% in September
compared to August, 2019 growth rate of 10.5%. It is
shown that this number is slightly decreased between
September 2019 and August 2019. The first 9 months
are strengthened by strong motivation in the field of
manufacture, power supply and water. The growth of
industrial production will have been continually raising
and leading in the field of production. Viet Nam is an
attractive country with low cost for manufacturing
companies, including people or businesses who want
to move from China to Vietnam due to the United
States-China trade, thanks to the cheap workforce and
government incentives to businesses.
Source: Focus- Economics
VIETNAM’ PMI, 2019
According to HIS Market’s announcement, PMI in
September 2019 (50,5) is lower than in August 2019
(51,4). However, Vietnam PMI in September 2019 is
still high at 50, which is shown that out Vietnam will
improve business conditions as below chart
Source: Focus-Economics
LIST OF PROJECTS ARE CALLING FOR INVESTMENT CAPITAL Q3/2019
No. NAME OF IP PROVINCE/ CITY ADDRESS
1 Co Chien IP Vinh Long Long Ho, Vinh Long
2 Cau Quan IP Tra Vinh Tieu Can, Tra Vinh
3 Co Chien IP Tra Vinh Mang Thit, Vinh Long
4 Xeo Ro IZ Kien Giang An Bien, Kien Giang
5 Thanh Loc IP Kien Giang Chau Thanh, Kien Giang
6 Tac Cau IP Kien Giang Chau Thanh, Kien Giang
7 Kien Luong IP Kien Giang Kien Luong, Kien Giang
8 Nhan Nghia IP Hau Giang Hau Giang
9 Dong Phu IP Hau Giang Hau Giang
LIST OF COMPANIES FOR READY-BUILT FACTORIES AND BUILD-TO-SUIT
INDUSTRIAL FACILITIES (RBF), Q3/2019
NO.
NAME OF
COMPANY
ADDRESS NAME OF IP
1
SCC INVESTMENT
CORPORATION (SCCI)
1145 Nguyen Thi Dinh
Street, Cat Lai Ward,
District 2, TP.HCM
KCN Tân Phú Trung (Cu Chi,
TPHCM)
KCN Vinatex Tan Tao (Dong
Nai)
KCN Hung Phu 1 ( Can Tho)
KCN Tan Do (Long An)
KCN Ta Duc (Long An)
2 BWID
No. 230 Binh Duong Bl,
Thu Dau Mot, Binh Duong
KCN VSIP Bac Ninh I & II
KCN VSIP Hai Duong
KCN VSIP Hai Phong
KCN My Phuoc 2 -3 - 4 (Binh
Phuoc)
KCN Bau Bang (Binh Duong)
KCN Nhon Trach 2 (Dong Nai)
3
NAM TAN UYEN JOINT
STOCK CORPORATION
Khanh Binh, Tan Uyen,
Binh Duong
KCN Nam Tân Uyên (Bình
Dương)
4 LONG HAU JSC
Long Hau, Can Giuoc,
Long An
KCN Long Hau (Long An)
High – tech Park (Da Nang)
5
CONSTRUCTION AND
MECHANIC.,JSC
No. 1025 Ngoc Gia Tu, Hai
An, Hai Phong
KCN Đồ Sơn (Hải Phòng)
KCN Hải Thành (Hải Phòng)
6 N&G CORP COMPANY
Level 5, A Tower, N04-Udic
Complex, Hoang Dao
Thuy, Trung Hoa, Cau Giay,
Ha Noi
KCN Nam Ha Noi (HANSIP)
7 KIZUNA JV
Lô K, KCN Tan Kim, Can
Giuoc, Long An, Vietnam
KCN Tan Kim (Long An)
8
TAN THUAN
INDUSTRIAL
PROMOTION
COMPANY LIMITED
Tan Thuan EZ, Tan Thuan
Dong, District 7, Ho Chi
Minh
Tan Thuan EZ (TPHCM)
9
SONADEZI GIANG
DIEN SHAREHOLDING
COMPANY
Level 1, Street 1, Bien Hoa
1 IP, An Binh, Bien Hoa,
Dong Nai.
KCN Giang Dien
12 13

PROSPECTS
Currently, the labor cost in Vietnam is only about 1/3 of China, less than US$ 1/ hour, is
the lowest in ASEAN and lower than China, this reason will encourage companies to
relocate their production facilities to Vietnam. It is this relocation that makes growth
of revenue for some industrial parks. Typically, Nam Tan Uyen Industrial Park JSC
reached VND 130.5 billion, up 48.76% compared to the same period last year or the
Corporation of Investment and Industrial Development (Becamex-BCM) announced
revenue of 6-month reached VND 3,379 billion, profit after tax reached VND 1,323
billion, an increase of 12% and 34.4% compared to the same period last year.
Vietnam is extremely trying to expand the free trade area, the latest of which is the
Europe - Vietnam Free Trade Agreement (EVFTA), which was signed at the end of June
2019, is also expected to increase the attractiveness of Vietnam’s industrial market to
boost demand for domestic industrial real estate.
According to the development plan to 2020, the total land area of industrial
development will increase two times. Hence the opportunity to own the land fund to
invest and develop in the field of industrial real estate is highly huge for both existing
investors and potential investors in the future.
Northern Region
The Northern region comprises of 25 provinces, with the North key Economics Zone
(NKEZ) making up 7 cities and provinces, including Hanoi, Haiphong, Bac Ninh, hai
Duong, Hung Yen, Vinh Phuc and Quang Ninh.
>> General information
Total land area (ha) 18,900
Average Net Lease
(USD/sqm/one-off term)
$76
Occupancy Rate (%) >70%
Cap Rate (%) 5% - 10%
>> List of Industrial Zones in Northern Region
LIST OF INDUSTRIAL
PARKS/ZONES IN
VIETNAM, 2019
Vietnam’s Industrial
Zones are spread out
across the country,
and are concentrated
with three administrative
regions – the Northern,
Central and Southern
Region. Each
region has its own
characteristics as well
as unique incentive
programs.
No. Province / City
Average Land Price
Occupancy
(%)
Average Warehouse
Rental Price
(USD/ sqm/ month)
Average Cap rate
(%)
1 Ha Noi 130 90% 2.4 6.40%
2 Hai Phong 90 80% 4.1 7 – 10%
3 Bac Ninh 80 72% 3.1 7.41%
4 Hung Yen 74 62% 1.7 5.44%
5 Quang Ninh 50 45% 1.9 7 – 10%
6 Thai Nguyen 53 60% 2.5 5.21%
7 Vinh Phuc 64 70% 3.0 7.49%
8 Hai Duong 64 90% 2.0 N/A
Central Region
The Central Key Economic Zone (CKEZ) compromises of 5 provinces – Thua Thien Hue,
Da Nang, Quang Nam and Binh Dinh, with the majority of activity occurring around
Da Nang.
>> General Information
Average Net Lease
$36
Cap Rate (%) 2%-6%
>> List of Industrial Zones
in Central Region
No. Industrial
Occupancy
(%)
Average Land Price
(USD/sqm/one-off
term)
Average Warehouse
Rental Price
(USD/ sqm/month)
Average Cap rate
(%)
1 Da Nang 86.80% 57 2.2 4.5 – 6%
2 Khanh Hoa 52.00% 40 2.0 2.2 – 3.5%
3 Quang Ngai 80.00% 25 1.5 N/A
4 Quang Nam 51.20% 24 1.4 1.8 – 2.4%
5 Binh Dinh 73.67% 20 - 24 1.5 N/A
6 Thua Thien Hue 71.50% 28 2.0 3.4
Southern Region
The Southern Key Economic Zone (SKEZ) is made up mainly 8 cities and provinces,
including HCMC, Binh Duong, Dong Nai, Long An, Ba Ria – Vung Tau, Binh Phuoc, Tay
Ning and Tien Giang. It is known as an industrial hub, which attracts the highest FDI
has given the favorable investment climate.
>> General Information
Average Net Lease
$81
Cap Rate (%) 5% - 8.5%
>> List of Industrial Zones
in Southern Region
No. Province/ City
Average Land Price
Occupancy
(%)
Average Warehouse
Rental Price
(USD/ sqm/month)
Cap rate
(%)
1 Tay Ninh 64 83% 2.6 6 – 7.5%
2 Vung Tau 66 64% 2.5 5.5 – 7%
3 TPHCM 142 91% 3.6 7 – 8.5%
4 Dong Nai 74 91% 2.7 6.5 – 8%
5 Binh Duong 75 93% 3.3 6 – 7.5%
6 Binh Phuoc 49 83% - N/A
7 Long An 93 64% 2.9 6 – 7%
8 Tien Giang 83 70% 2.1 6 – 8%
14 15

INDUSTRIAL
REPORT
Q3 | 2019
Note: The property market research contained is verified to the best of TMS
Consultancy’s abilities. TMS Consultancy reports reflect an overview of the
current property market and are indicative research only. TMS Consultancy
does not guarantee the accuracy of research and forecasts contained herein.
TMS Consultancy does not accept any responsibility for losses arising from
reliance on the research and forecasting. TMS Consultancy recommends that
the reader obtain a detailed market study of the specific sector of interest
should a deeper understanding of the market be required.
For more information:
LE QUOC HUNG
General Director
+84 906 787 134
hung.le@tms-investment.com
GENNIE PHAM
Market Research Director
+84 976 917 368
gennie.pham@tms-investment.com
Suite 6.04, Nam Viet Building 09 Phan Ke
Binh, Da Kao Ward, District 1, HCMC
+84 906 787 134
info@tms-investment.com
www.tmsconsultancy.com.vn
TMS Consultancy
consultancy

Industrial Market Report 2019

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