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Industrial properties - a new trend at IPs

DA NANG Today
Published: November 22, 2016

After over 20 years of construction and development, Da Nang now has 6 dedicated industrial parks (IPs) covering a total area of over 1,055ha.  They are the Hoa Khanh, expanded Hoa Khanh, Da Nang, Lien Chieu, Hoa Cam and Da Nang Seafood Services IPs. 

The Nissan automobile factory in the Hoa Khanh IP
The Nissan automobile factory in the Hoa Khanh IP

Over the past years, the local authorities have made great efforts to perfect their policies on foreign investment into IPs, and speed up administrative reforms by implementing an open and transparent ‘one-stop’ mechanism.  In addition, information about the vacant land funds in the IPs has been widely publicised to allow access to domestic and foreign businesses who want to use the land for production.

Currently, 957ha of the IPs’ total rentable space have been leased by investors, whilst the remaining 97.97ha are still vacant.  Of these, only 68.75ha are earmarked for developing infrastructure, and this figure is still modest in comparison with the land-use requirements in the IPs of businesses from home and abroad.

According to the city's Small and Medium-sized Enterprises (SMEs) Association, 97% of local private businesses are medium or small in size.  Therefore, they find it very difficult to rent land in the IPs because they are required to rent too large an area and pay lease fees as a one-off for a 50-year term.

In order to deal with this problem, great efforts have been made to develop an industrial real estate market, with a focus on building eco-IPs which will attract environmentally-friendly projects.

Recently, the city’s People’s Committee has approved plans to develop 4 new IPs, covering a total area of 1,626ha, over the 2016 - 2020 period.  They are the 2nd phase of the Hoa Cam IP covering 176.6ha, the 545.8ha Hoa Nhon IP, the 676.6ha Hoa Ninh IP, and the 227ha Hoa Son IP.  The new IPs’ preliminary wastewater treatment systems are required to meet the city’s B standard, and their treatment quality at the company has to meet the city’s effluent discharge A standard.  The construction of the new IPs will start next year.

The city authorities will appeal for more public-private partnership (PPP) investments into the new IPs from domestic and foreign investors, especially those from the USA, Japan, Singapore, South Korea and European countries.  The developers will be responsible for bearing all the costs of site clearance, compensation, and investment promotion activities. 

According to the latest research conducted by Savills, Viet Nam's largest real estate services provider, the recent signing of some economic agreements has opened up a chance for Da Nang to develop its eco-industrial real estate market.  For example, in October the Singaporean Sembcorp Development Company conducted a feasibility study on the construction of a modern, smart and environmentally friendly integrated software park in the Da Phuoc urban area.

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