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Hai Phong's industrial real estate towards new standards
06/08/2019 17:55 | Source: Vietnam Investment Review
On the back of its diversified and high-quality infrastructure, Hai Phong currently offers a multitude of advantages compared to other locations in the Northern economic triangle.

“The US-China trade war is now creating a new wave of investment flows from China, including Chinese enterprises and foreign investors based in China, to Vietnam, especially the northern area by virtue of its geographical proximity,” said Nguyen Thanh Phuong, general director of Sao Do Group, the developer of Nam Dinh Vu IP in Hai Phong city.

The city has a huge advantage because there are many IPs and EZs with good infrastructure and convenient transport connections by rail, sea, air, and road.

Hai Phong industrial real estate

Data from Savills Vietnam shows that by the end of the first quarter of 2019, Haiphong city was providing about 2,700 hectares of industrial land for lease, accounting for about 57 per cent of the total industrial land area of the city.

In particular, Hai An district is the most dynamic area, accounting for 64 per cent of the total land area for lease.

According to the government planning, in the coming time, Haiphong city will build five-six more IPs, increasing the total number of approved IPs to nearly 20. Thus, supply will continue to rise.

As reported by Haiphong Economic Zone Authority, until the end of April 2019, city-based IPs and EZs have attracted 329 foreign direct investment (FDI) projects with a total cumulative investment capital touching $13.95 billion (accounting for nearly 80 per cent of the city’s total committed FDI volume); and 147 domestic investment projects (DDI) with investment capital surpassing VND142.567 trillion ($6.2 billion).

However, Nguyen Thanh Phong, the top leader of Sao Do Group,assumed that “this piece of cake" is not "delicious" to all industrial park investors, especially domestic ones. This is because the requirements raised by foreign investors are becoming increasingly stringent, while competition is getting fiercer. Hai Phong city should not continue approving new IPs, but focus on filling up the space at existing IPs and EZs, he added.

In the Fourth Industrial Revolution (Industry 4.0) has changed everything. Investors no longer regard abundant and cheap labour as one of the chief factors in choosing investment locations because in the long term this factor will no longer exist.

In addition, automated machines will gradually replace unskilled labour. Therefore, a source of good quality labour is what investors care about.

IP developers should pay more attention to supporting customers to attract good human resources. For example, with Nam Dinh Vu IP, Sao Do Group spent 2.5ha (phase I) to build houses for experts and workers. Currently, the group is planning to co-ordinate with the Vietnam General Confederation of Labour to deploy construction.

In the new development stage, IP developers will not only need to focus on taking care of investors’ needs, but the needs of workers who work at the IP as well.

This is the new defining standard for IPs, Phuong affirmed: “Besides, the landscape and internal environment will be indispensable factors when big investors choose locations. This is what Nam Dinh Vu IP continues to maintain.”