Despite the complicated and prolonged COVID-19 situation, the industrial real estate market in Da Nang is accelerating in terms of investment capital and supplies in a positive direction. Public investment resources and businesses help promote industrial production.

The industrial real estate market in Da Nang is forecasted to witness an upward trend. Construction workers are seen at the Da Nang IT Park project in Hoa Vang District. Photo: TRIEU TUNG

Creating supplies to support industrial production

According to the Da Nang Department of Statistics, as of mid-May, 2021, Da Nang had attracted a total of 711 domestic investment projects with a total investment capital of more than VND 148,000 billion. Of this, there were 368 domestically-invested ones based in industrial parks (IPs) and the Da Nang High-tech Park worth a total of over VND 26,000 billion.

For the time being, Da Nang houses 6 put-in-to-operation IPs covering a combined total area of over 1,066 ha with an average occupancy rate of 86%, namely Hoa Khanh, Expanded Hoa Khanh, Lien Chieu, Hoa Cam, Da Nang and Seafood Services IPs.

Besides, the selection of contractors for the development of 3 new IPs is in progress, namely the 400ha Hoa Ninh, 360ha Hoa Nhon and 120 ha Expanded Hoa Cam IPs.

In addition, the 2ha Da Nang Software Park No. 1,  the 5.3ha Software Park No. 2, the 341ha centralised IT Park, the 5.9ha FPT Complex and the over 1,128 ha High-tech Park have emerged as attractive venues for many secondary investors involved in industrial properties.

Recently, the Prime Minister has agreed to add the over 58.5ha supporting Industrial Park of the Da Nang Hi-Tech Park to a master plan for developing IPs in Da Nang. This has created an important premise for the city to drive the development of supporting industries, especially satellite business that provides supporting components for businesses in the Da Nang High-tech Park.

On the other hand, the city has also prioritised planning and approving a project for developing industrial clusters (ICs) in Da Nang by 2030.

Under specific objectives, in the 2021 – 2025 period, the city plans to develop up to five new ICs to meet land demand of super small, small and medium-sized enterprises, industrial production and handicraft making facilities.

In particular, work is expected to start on the infrastructure construction of the Non Nuoc stone carving village IC and the Hoa Son split stone village IC in a bid to properly manage environmental issues and enhance production efficiency.

Mr. Pham Truong Son, the Head of the Authority of the Da Nang High-Tech Park and Industrial Zones, said that, in the coming time, in order to attract more manufacturers and ancillary units, priority should be given to developing industrial real estate at a large scale.

Many changes in investment and market

Covering a total area of 29 ha, the Cam Le Industrial Cluster project is being carried out in the 2018 - 2022 period with a total cost of VND 250 billion funded by the municipal budget.

According to a report made by the municipal People's Committee, more than 90% of the workload on the first stage of the Cam Le Industrial Cluster project in Hoa Tho Tay Ward, Cam Le District, Da Nang, has been completed, said the municipal government.

The first stage of the project, whose construction started in June 2019, features major work items such as leveling, traffic, drainage, water and electricity supply, and landscaping and wastewater treatment systems worth more than VND 58 billion in total.

Meanwhile, work started on the second stage of the project in March at a cost of more than VND53 billion, and 10 - 15% of the workload has reached completion.

The increasing demand for industrial land creates favourable conditions for a boost in the development of new industrial real estate projects. In the photo is a already-planned area for industrial parks in Hoa Vang District. Photo: TRIEU TUNG

The biggest change in the supply of industrial real estate has been recorded in the first stage of the concentrated IT Park project.

Trungnam Group, the developer of the IT Park project, is urgently accelerating the construction of a specialised ICT factory complex covering an area on an area of 9.3ha in subdivision No. A2 with 5 factories with an area of 4,000 - 6,000m2/floor and a 3-storey showroom and internal technical infrastructure.

The group is now calling for investors to rent with flexible leasing facilities ranging from 2,000m² to 8,000m² with a floor load 2 - 3 tonnes/m² and a workshop height of 6m.

Industrial properties in the concentrated IT Park project currently cover a total area of 47ha, including 22 factories of 2 - 6 storeys with reinforced concrete, stairs, anti-static epoxy floors , soundproof walls, heat insulation, construction density of less than 40% and a tree coverage of 30%.

Also, these factories are integrated with auxiliary works such as offices, warehouses, canteens with a smart, modern and cool yards and parking systems.

In addition to the above projects, the municipal People's Committee is on track to complete necessary procedures calling for investment and selecting contractors for the development of 3 new IPs, namely the Expanded Hoa Cam, Hoa Nhon and Hoa Ninh IPs with an expected total capital of more than VND15,842 billion.

According to real estate experts, although the overall real estate picture was affected by COVID-19 in 2020, the industrial property segment alone still recorded quite good growth.

It is forecasted that, in the remaining months of 2021, Viet Nam’s real estate market, as a whole, is expected to resume its bustling vibe, and that of Da Nang is no exception, hopefully.

Director of Savills Ha Noi Matthew Powell has projected that the real estate market in 2021 still has potential for development. Viet Nam has more real estate investment opportunities than other more mature Asia-Pacific markets, although certain difficulties remain.

Given its convenient geographical location and reasonable investment incentives, Da Nang will continue to attract industrial investors from both home and aboard in the coming time.

“Industrial real estate in Da Nang is forecasted to continue to expand in the near future thanks to its advantages in terms of costs as well as the national government's incentives for industrial development.

Currently, many businesses have been making very active investments in this field,” Mr. Matthew Powell said.

Reporting by TRIEU TUNG- Translating by A.T