INDUSTRIAL PARK (IP) LAND
SUPPLY: MARKET ABSORPTION OF AVAILABLE SPACE
In Q1 2025, the market did not record any new supply of industrial land supply in the NKEZ. The current supply remains approximately 16,800 hectares, unchanged from Q4 2024, and represents a 9.24% increase compared to the same period last year. Among the provinces, Bac Ninh leads the supply with a rate of 17.9%, followed by Hai Phong at 16.04%.
DEMAND: THE NKER RECORDS GROWTH
Compared to Q4 2024, the total net absorption reached 148 hectares, marking a 78.3% increase. The occupancy rate of industrial parks in Bac Ninh, which stands at 54.05%, has significantly contributed to this growth. This substantial increase is attributed to the development of infrastructure and the impact of the US-China trade war. The demand for industrial land primarily comes from the electronics components and machinery manufacturing sectors.
PRICE: INDUSTRIAL LAND PRICES CONTINUES TO GROWTH
The average asking rental price for industrial land (IZ) across the market in Q1 2025 was recorded at US$ 132/sq.m/lease term, reflecting a 5.6% increase compared to the same period last year and a 1.54% increase from the previous quarter. This increase indicates high demand for industrial land, leading some projects to adjust rental prices upwards by approximately 4-5%.
OUTLOOK
Approximately 7,000 hectares of industrial land will enter the market from 2025 to 2027. In the first three months of 2025, two prominent industrial park (IP) projects in the North have commenced: VSIP Thai Binh IP with a scale of 333.4 hectares and Song Cong IP Phase 2, which will add 296.24 hectares to the industrial land supply.
The provincial merger will optimize resources, enhance management, and promote regional economic development, creating favorable conditions for industrial zone projects in the North. Additionally, the government has mandated the immediate expansion of Gia Binh Airport into an international dry port of grade 4E. The expansion project of the North-South Expressway, Eastern section from Cao Bo to Mai Son, spanning over 15 km, has commenced. Furthermore, the government has proposed projects to expand existing roadways. These government directives are driving forces that will further invigorate the industrial real estate market in the North.
READY-BUILT FACTORY (RBF)
SUPPLY: ONE NEW RBF PROJECT LAUNCHED
A new RBF project by CNC Tech Vinh Phuc has been launched, adding approximately 114,000 sq.m to the existing market supply. The total RBF supply in the Northern Key Economic Region currently stands at 4.4 million sq.m, representing a 3.45% increase from Q4 2024 and a 17.9% increase compared to the same period last year.
DEMAND: SLIGHT GROWTH IN EARLY 2025
In early 2025, the total net absorption area reached 180,000 sq.m, with the occupancy rate increasing by 2%, indicating a rise in factory rental demand from businesses compared to the end of 2024. Hai Phong achieved a net absorption rate of 49.17%, followed by Bac Ninh at 31.83%. Additionally, the market has seen a shift towards provinces with lower rental rates and development potential, such as Vinh Phuc. This has pushed Vinh Phuc's rental rate up to 20.1%.
RENT: FACTORY RENTS INCREASED SLIGHTLY AMID MARKET FLUCTUATION
The average rental price for RBF across the market was recorded at US$ 5.0/sq.m/month, a slight increase of 0.1% from the previous quarter and 0.3% from the same period last year.
OUTLOOK
From 2025 to 2027, as highways are expanded from 6 to 12 lanes according to the Ministry of Construction's report to the government, and Gia Binh International Airport becomes operational along with the completion of connecting roads to Hanoi, the market is expected to receive approximately 856,000 sq.m of ready-built factory (RBF) space. This will make the Northern Key Economic Region a focal point for development.
In the following quarters of 2025, the Frasers project at the expanded Yen Phong IP will be handed over, and the Sembcorp project in Hai Phong, which has commenced construction, is expected to become operational in Phase 1 in Q3 2025, providing the market with approximately 100,000 sq.m of rental factory space.
READY-BUILT WAREHOUSE (RBW) & READY-BUILT HYBRID (RBH)(*)
SUPPLY: NO NEW PROJECTS ENTER THE MARKET
At the beginning of 2025, no new RBW projects were recorded in the North. The total RBW supply in the Northern Key Economic Region exceeds 2.9 million sq.m, increasing 1.32 times year-on-year. Bac Ninh leads with a supply rate of 41.27%, followed by Hai Phong and Hung Yen at 20.09% and 16.98%, respectively.
DEMAND: STABLE DEMAND
In Q1 2025, the total net absorption area reached approximately 50,800 sq.m, a decrease of 6.6% compared to the previous quarter and 1.4% compared to the same period last year. Bac Ninh leads with a net absorption rate of 67%, followed by Hai Phong and Hung Yen at 20.57% and 10.46%, respectively. The increase in net absorption area in Hung Yen and Hai Phong can be attributed to the efforts of developers to improve infrastructure and attract manufacturing enterprises.
RENT: RENTS REMAINED STABLE
In Q1 2025, the average rental price for ready-built warehouses (RBW) remained at US$ 4.9/sq.m/month, unchanged from the previous quarter. However, this price has increased by 4.7% compared to the same period last year. The annual rental price increase is mainly due to the recent market entry of several high-quality, multi-story projects. Nevertheless, most projects on the market have maintained stable rental prices to attract tenants in a competitive market.
OUTLOOK
Regarding future RBW supply, the Northern Key Economic Region will welcome approximately 800,000 sq.m to the market over the next three years (from 2025 to 2028), led by Bac Ninh and Hai Phong at 44.89% and 20.57%, respectively. In the following quarters of 2025, projects such as the second warehouse of Horizon Park Bac Ninh and SLP Yen Phong 2C will contribute approximately 100,000 sq.m of ready-built warehouse space to the market. The consolidation of provinces brings many benefits to ready-built warehouses, such as increased investment, upgraded infrastructure, reduced administrative procedures, and enhanced competitiveness. These factors create a favorable environment for the development of ready-built warehouses and attract more investors.
Learn more by downloading our most recent Northern key economic zone industrial MarketBeat.
