Vietnam should encourage development of industrial cluster model
Commenting on Vietnam's industrial real estate market, Troy Griffiths, Deputy General Director of Savills, said the country should promote the development of separate industrial cluster model to increase competing capability.
According to Troy Griffiths, in highly industrialized countries, the development of separate automatic industry clusters is very important. This practice helps to bring better operating efficiency since the steps in the production process are located close to each other and synchronized. The value of focusing on cluster development has been recognized for separate industrial sectors, allowing provinces or regions with low competitiveness to develop and compete more effectively. At the policy level, centralizing areas by industry also benefits the tenants better, rather than the context of separate and scattered industries across the country.
| Vietnam's industrial real estate is highly appreciated for its potential and development opportunities. Photo: Vietnamplus |
Many domestic and international real estate investors are now targeting industrial land because of the potential that this type of real estate offers. Factors such as global trade, geopolitics and infrastructure development contribute to changing the nature of industrial real estate in Vietnam. In addition, the modern logistics and retail industry has a disruption characteristic, creating a very interesting development context for industrial real estate.
Talking about the localities with strong potential for developing industrial clusters, Griffiths said Hai Phong city, which is developing auto industry segment with favorable infrastructure, close to major markets, will be an outstanding industrial locality. In addition, Da Nang is also a market that converges all the prerequisites for developing high-value industrial real estate. Besides, Long An has the advantage of low rents and will benefit from connecting Ben Luc 3 belt road. Binh Duong, thanks to its close connection with Ho Chi Minh City, has been seeing a rapid increase in land prices.
The future of the local industrial real estate market is determined by the high value industries or industries in sector 3 of the economy, which are service industries. New international players entering the market are familiar with cluster-focused development, as this is a common practice in their former industrial markets. Industrial clusters by industry will be driven through government policies, corporate income tax incentives and strategic planning. Thus, the economic impact of industrialization will be spread across the country instead of focusing on a given area.
