Vietnam’s industrial real estate market continues to attract investment thanks to the strong development of industrial parks, particularly in key areas such as Ho Chi Minh City, Bac Ninh, and Dong Nai. The rental prices for factories and industrial park land vary by location and factors such as transportation, infrastructure, and labor availability. In this article, KTG Industrial provides an overview of industrial park rental prices in key regions across Vietnam.
Costs and prices for industrial park rental
Basic rental price
Base rental prices depend on several factors:
- Geographical Location: Industrial parks near economic centers, ports, and airports tend to have higher rental prices due to logistical advantages. Parks located further from urban centers are usually cheaper but may incur higher transportation costs. Industrial parks in major economic hubs such as Ho Chi Minh City and Hanoi generally have higher rental prices due to their strategic trade locations and abundant labor supply.
- Infrastructure: Industrial parks with modern infrastructure, well-developed transportation systems, and integrated electricity and water systems have higher rental rates. Poor infrastructure may lower rental prices but increase operational costs.
- Market Demand: When demand is high, rental prices rise. Conversely, during periods of lower demand, prices may be adjusted to attract investment.
- Lease Area: Larger lease areas generally reduce the cost per square meter, while smaller plots may be more expensive due to higher demand.
- Planning and Policies: Government incentives play a crucial role in industrial park rental pricing. Favorable investment policies can lower rental costs to attract businesses, whereas inefficient planning can drive up prices while limiting tenant interest.
Additional costs
Beyond base rental rates, businesses should consider supplementary costs that significantly impact total leasing expenses, including:
- Management Fees: Covering security, infrastructure maintenance, and either charged as a percentage of the rental price or as a fixed monthly fee.
- Service Fees: Covering cargo handling, internal transportation, and equipment maintenance. These should be factored into budgeting to prevent unforeseen expenses.
Industrial park rental prices will vary by region.
Contract flexibility
Flexible lease terms have a significant impact on overall rental costs. Businesses planning to expand or modify their production scale should negotiate flexible terms from the outset to avoid unnecessary costs. This flexibility allows adjustments without incurring hefty penalties or expensive contract modifications.
Lease duration also directly affects rental rates. Long-term contracts typically offer lower rental rates as industrial park owners seek stable revenue streams. In contrast, short-term leases tend to be more expensive due to uncertainties surrounding renewal. For instance, a business signing a 10-year lease may enjoy lower rates than one opting for only two years.
Additionally, the nature of production influences rental expenses. Heavy industries such as steel manufacturing and chemical production require complex infrastructure and extensive space, leading to higher rental costs. Conversely, light industries like garment manufacturing or electronics assembly require simpler infrastructure, resulting in lower rental rates. For example, a steel factory may need an industrial park equipped with advanced waste treatment systems, whereas a garment workshop can operate in a less sophisticated facility at a lower cost.
Industrial park rental cost in Vietnam
The industrial park rental cost in Vietnam per month varies by region, with higher prices in the South and lower in the North. Specifically:
- Southern Region (primarily Ho Chi Minh City): Industrial parks in Ho Chi Minh City acquire the highest rental rates due to their strategic location, excellent transportation networks, and abundant labor supply. Prices range from 90,000 to 110,000 VND/m²/month, depending on service quality and park location.
- Northern Region: Industrial parks in major cities like Bac Ninh and Hai Phong with lower rental rates, ranging from 45,000 to 80,000 VND/m²/month. Rates vary based on location and factory type, with options including self-built factories and ready-built factories.
- Areas Near Ho Chi Minh City (Long An, Dong Nai): Rental prices in these areas are not as high as in Ho Chi Minh City but remain attractive to small and medium-sized enterprises. Rates range from 70,000 to 120,000 VND/m²/month, providing cost-saving opportunities while maintaining proximity to Ho Chi Minh City.
Comparison of Industrial Park Rental Prices Across Northern, Central, and Southern Vietnam
Benefits of investing in industrial parks at reasonable costs
Save operating costs
Investing in industrial parks offers significant advantages for businesses, particularly in cost optimization and supporting sustainable development strategies.
Leasing factories in industrial parks enables businesses to save significantly on operational costs compared to constructing their own facilities or renting outside urban areas. Compared to building factories or leasing in urban areas, industrial park rental costs are generally more affordable, especially for small and medium-sized enterprises. This allows businesses to allocate budgets toward strategic activities such as research, product development, marketing, or production process improvements.
Industrial parks provide well-developed infrastructure, facilitating the transportation of goods and raw materials while reducing logistics costs. Essential utilities such as electricity, water, and telecommunications are pre-established, minimizing maintenance and repair expenses.
Leasing Factories in Industrial Parks Helps Reduce Initial Investment Costs
Leasing land in industrial parks is often more cost-effective than renting commercial land. Industrial parks frequently receive government-backed infrastructure investments, lowering land rental costs for businesses. Additionally, renting land in an industrial park helps businesses save on construction costs for factories and other infrastructure components, leading to significant financial efficiency.
Industrial parks offer 24/7 security services, ensuring the safety of assets and production activities. A secured environment enhances business confidence in operations and minimizes risks related to security.
Enhance competitiveness
Investing in industrial parks at reasonable costs helps businesses improve their market competitiveness. By reducing operational expenses, businesses can lower product prices, attract more customers, and increase revenue.
Cost savings also create opportunities for investment in other development activities, such as product research, marketing, and production process enhancements. This allows businesses to compete not only on price but also on product quality and innovation.
Expand cooperation opportunities
Expanding collaboration opportunities is one of the key advantages of investing in industrial parks. With a concentration of businesses from various industries and sectors, industrial parks create an ideal environment for networking, partnerships, and business connections. Companies can easily find collaboration opportunities, from resource and technology sharing to joint product development.
The industrial park environment fosters cooperation among businesses, facilitating resource sharing and joint product development. This enables businesses to expand their markets and enhance brand value. By leveraging strategic relationships, companies can achieve sustainable growth and strengthen their competitiveness in the market.
Industrial park leasing solutions in Vietnam of KTG Industrial
KTG Industrial Strengthens Its Leading Position in Industrial Park Leasing Solutions in Vietnam
KTG Industrial takes pride in being a premier provider of industrial park solutions in Vietnam, offering high-quality, optimized leasing options for businesses. Through a strategic partnership between Boustead Projects (Singapore) and Khai Toan Group (Vietnam), KTG Industrial delivers projects built to international standards, ensuring compliance with stringent quality, safety, and sustainability requirements.
KTG Industrial’s industrial park leasing solutions in Vietnam include projects strategically located in key regions such as Dong Nai and Bac Ninh. The company provides a range of products and services, including:
- Ready-built factories: Floor loading capacity of 1-2 tons/m², clear height of 6.5m – 8.7m.
- Ready-built warehouses: Floor loading capacity of 2-3 tons/m², clear height of 9-10m.
- Built-to-suit factories: Customized design and construction based on client specifications, incorporating tailored space planning, architecture, and professional project management services.
Notably, KTG Industrial integrates energy-efficient technologies into its projects, such as rooftop solar power and wastewater treatment systems, reducing operational costs and promoting environmental sustainability.
Conclusion
Industrial park rental prices in Vietnam vary significantly by region. Southern industrial zones, particularly in Ho Chi Minh City, command higher rental rates due to strong demand and infrastructure development. Meanwhile, the northern and central regions offer more competitive pricing, providing cost-saving opportunities for businesses. However, with the increasing supply of industrial space and supportive government policies, rental rates are expected to remain at reasonable levels, helping businesses optimize their operational costs.
