HCMC – Prime Minister Nguyen Xuan Phuc has asked the Ministry of Planning and Investment to coordinate with the relevant agencies to look into the soaring land rents at industrial parks and work out a solution over the issue.
The land rents at industrial parks have reportedly increased sharply by three to four and even 10 times in the past few years.
Together with the impact of Covid-19, the high land rents have put enterprises in a difficult situation. Moreover, some localities have asked firms to pay land rents annually and have not issued land use rights certificates, so firms have no mortgages to borrow bank loans.
During the second Covid-19 wave, the land rents at industrial parks in HCMC, Binh Duong, Dong Nai and Long An increased by 20%-30%.
According to a recent report by property service provider CB Richard Ellis (CBRE) Vietnam, the industrial property market in the southern region has posted a growth in the price and occupancy rate. The industrial land rents have risen 20%-30% against the third quarter last year.
The occupancy rate in the southern key industrial region reached 84.5%, while the rates in Binh Duong, Dong Nai and Long An were over 80% and in HCMC, 90%.
In the January-September period of this year, ecommerce companies reported a higher demand for the expansion of the distribution network. Therefore, new storehouse rents have gone up 5%-10% year-on-year.
The land rents at some industrial parks in HCMC have doubled, from US$150 to US$300 per square meter on average. In Dong Nai, the rent increased from US$100 to US$155 per square meter, while Long An recorded a surge from US$110 to US$200.
CBRE Vietnam deputy general director Pham Ngoc Thien Thanh said the land rent hike and the Covid-19 waves had caused multiple difficulties for enterprises. Investors of some industrial parks have supported them by reducing land rents and infrastructure maintenance fees, extending payment deadlines and even exempting firms setting up their factories during the pandemic from paying land rents.
However, the support would be in the short term and for certain sectors.
In some northern localities, the land rents have been lower than in the southern region but also posted growth. For example, the rent in Hanoi has increased from US$150 to some US$260 per square meter, while that in Bac Giang Province has doubled from US$55 to US$110.