The increasing demand for infrastructure construction, civil engineering works, construction of processing, and manufacturing factories in industrial parks along with the “warming” of the real estate market are favorable conditions for the implementation of projects.
Positive industrial real estate
In 9M/2021, the average occupancy rate at industrial parks in the five main industrial provinces and cities in the North reached 78.5%, an increase of 0.5 ptt by year. Similarly, occupancy rates in the four main industrial provinces and cities in the South reached 87.2%, up 0.2 ppt by year. In terms of transaction size in 9M/2021, land lease transactions ranging from 3 ha to 25 ha.
In Q3/2021, the demand for land rental and ready-built warehouses/factories recorded a slight decline due to restrictions on movement between cities and foreign flights. CBRE expects the real estate market to be active again after restrictions on movement are gradually lifted in Q4/2021. Thanks to a positive occupancy rate, the average land rent has remained stable in the main industrial cities despite the pandemic.
The trend of moving to the neighboring provinces of HCMC and Hanoi of industrial parks and tenants is becoming more and more obvious when the land rent in these industrial centers is more than double that of neighboring provinces, while the industrial land fund is not much.
Resort and retail real estate continues to struggle
Due to the long-lasting effects of the 3 outbreaks so far, the tourism and resort real estate sector is still heavily affected even if the epidemic situation is effectively controlled. It is expected that in the last months of the year, domestic customers will still be the main source of demand for this market. Discount packages of hotels, resorts, and airlines will continue to increase the number of domestic tourists when the epidemic situation in the country is under control. In addition, plans to welcome international visitors in the longer term will also need to be carefully prepared to receive this demand while still ensuring safety.
Regarding the real estate retail market, in Hanoi, an additional 73,000 m2 of new retail space is expected to come from shopping malls in housing projects or urban areas in the second half of 2021. The pent-up of consumer demand will be a stepping stone to improve consumption and the flow of people to shopping center projects.
In HCMC, from now until the end of the year, most investors of shopping centers will support existing tenants depending on the level of business impact as well as the future flow of buyers. Vacant areas will be gradually improved, but will also face competition from the rental in townhouses, etc.
“Bright star” after Covid – affordable housing segment
In the market recovery scenario, residential real estate will be the most active market because the real demand for housing is still an urgent need of the people. With the current situation, when many people are limited in income, lose their jobs or have their wages reduced, and do not have many sources of accumulation, the purchasing power in the market will be more modest than in previous years, mainly focusing on the affordable housing segment in major cities across the country.
According to experts, this is the segment that meets the real demand, when the epidemic ends, the psychology of home buyers will gradually stabilize. It is also the time when investors will have “stimulation” programs to support them. For the apartment market, the new sales for the whole year of 2021 are expected to be maintained at or higher than that of 2020. Positive demand in both Hanoi and HCMC markets will support increased sales. In addition, the expansion of the housing market in the two major markets to neighboring provinces contributes to product upgrading, setting new standards in the local market, on the other hand, helping home buyers more options.