Ho Chi Minh City industrial park rents up 5% in Q3

The occupancy rate was at 90%.

According to a report from Avison Young, in Q3 2024, the average asking rental rate (ARR) for industrial parks in Ho Chi Minh City experienced a 5% q-o-q increase, reaching 240 USD/sqm/term and an occupancy rate of 90%. 

“However, many industrial parks, some of which have been operating for 10-20 years, have outdated plans compared to modern standards and need review and adjustment to enhance land use efficiency.”

Here’s more from Avison Young:

There is high demand for land from high-tech, logistics, and e-commerce sectors, but supply is limited due to rapid urbanisation. Due to high rental costs and scarce land, many companies are shifting to neighbouring provinces like Binh Duong, Dong Nai, and Long An. HCMC maintains an advantage in infrastructure and investment policies, but slow infrastructure improvements are impacting investment attraction. Global factors such as supply chain issues and material costs are also making investors more cautious about long-term leases. 

Rental rates are expected to rise slightly in the final quarter of 2024, especially in areas outside the city centre, where infrastructure development potential and more reasonable costs are available.

Supply and Demand

In Q3 2024, HCMC did not record any new industrial parks, with the market supply totaling approximately 5,000 ha of natural land. The prolonged land scarcity for industrial production has diminished the city's competitive advantage, especially for high-tech projects. Recently, HEPZA proposed adding 11 new industrial land sites for future development. 

However, leasing difficulties due to legal and planning issues have slowed investment, with Ho Chi Minh City attracting only 271.99 million USD into its export processing zones and industrial parks in the first half of 2024, achieving just 49.45% of the plan. 

To support the transition of five export processing zones and industrial parks—Tan Thuan, Hiep Phuoc, Tan Binh, Cat Lai, and Binh Chieu—HEPZA is collaborating with Tay Ninh, Long An, and Binh Thuan provinces to secure relocation land. Phuoc Dong Industrial Park in Tay Ninh is set to provide 150-200 ha, while Long An plans to allocate 500 ha. HCM is also planning 100 ha at Hiep Phuoc Industrial Park (Phase 3). The transition will focus on high-tech, logistics, and eco-industrial parks, aiming for completion by April 2025.