The first sod was turned at a 250-hectare industrial park in Bac Ninh Province, northern Vietnam on Sunday, with an estimated cost of nearly VND4 trillion (US$168 million).

The Gia Binh II industrial park project, whose investor is Hanaka Group, was designed to become a clean industrial park to attract eco-friendly and high-tech projects.

The park will prioritize investors in the electronics assembly and production, information technology, and high technology fields.

Land lots will be handed over to the investor to start the construction of their facilities in the fourth quarter of 2023.

Some plants will be put into operation at the Gia Binh II industrial park in the first quarter of 2024.

Le Trong Hieu, head of office, industrial, and real estate advisory services at realty consultancy firm CBRE Vietnam, said that the local industrial property market is showing some positive signs, especially the northern market after China reopened its doors in March.

The number of Chinese investors registering to lease industrial land in the northern region is on the high rise, said Hieu.

Over the past few months, most industrial real estate transactions reported in the northern region have come from Chinese customers, with a focus on some fields prioritized by Vietnam such as technology.

A slew of industrial park projects have got off the ground in the first half of the year, while land rents in these parks have soared.

A survey recently conduced by CBRE Vietnam showed that limited land lots and rising demand of leasing land in industrial parks pushed up the land rental in southern and northern Vietnam between January and June. 

Land rents in the industrial parks in the southern region have grown seven percent per year on average over the past four years, while the average annual rent in the northern part of the country has expanded 13 percent.

The scarcity of industrial land lots and high rental prices have encouraged investors to build industrial parks across the country.

Many provinces and cities such as Hanoi, Bac Giang, Nam Dinh, Binh Phuoc, Ba Ria-Vung Tau, Dong Nai, and Quang Tri have sought to develop industrial parks, or started work on these projects.

Among these industrial park projects are VSIP Thai Binh, Quang Chau 2, Dong Anh, Trung Thanh, Yen Son - Bac Lung, Minh Hung III, Phuoc Binh 2, and Quang Ngang.

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