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FLUCTUATIONS IN FACTORY RENTAL PRICES IN 2021

Time: 27/07/2022
FLUCTUATIONS IN FACTORY RENTAL PRICES IN 2021
The 3rd Wave of Covid is sweeping the real estate market in general, but industrial real estate is the only sector has an uniform growth. Let's take a look at factory rental prices with Vinh Loc this year.
 
Factory rental price market in Ho Chi Minh City
Ho Chi Minh City and Hanoi are the two most sought-after locations when choosing to build or rent factories. However, the rental price of factories in this area is always high, which is a huge obstacle for businesses that need to balance the company's budget.

Factory rental prices in Ho Chi Minh City are higher than in neighboring areas
Ho Chi Minh City is the largest industrial center in Vietnam. Because of possessing an important strategic location such as owning large ports, having Tan Son Nhat airport, convenient transportation and being a place to welcome the latest technologies in Southeast Asia, factory rental prices in Ho Chi Minh City are always higher than the general premises.
 
Geographical location plays an important role in rental price

According to statistics, factory’s renatl prices are also based on the location of different districts. If the traffic is convenient, the roads are well ventilated and the factories are located in the center, the rental price will be higher:
District 4: 100m2 - 7,300 m2.  Price: 8 million - 525 million/ month
District 8: 170m2 - 18,000 m2. Price: 10 million/month
District 9: 1,200 m². Price: 30 million/month
Go Vap District: 200m2 - 4,200m2. Price: 10 million/ month
Hoc Mon District: 150m2 - 7,300m2. Price: 6 million - 467.5 million/ month

Currently, to save factory rental costs, businesses often choose factories located on the outskirts of Ho Chi Minh City. The suburban area has convenient traffic, not close to residential areas, and the travel time to the industrial center (Ho Chi Minh City) is very short.

Factory rental price in Ho Chi Minh City has a discounted price if renting for a long time
Enterprises must commit to rent factories for at least 2 to 3 years. Thus, according to market fluctuations, factory rental prices in Ho Chi Minh City can range from 0.1-0.2 USD depending on the contract term.
 
Typically, business owners can negotiate with the lessor for a maximum discount when renting a factory for 10 years
Industrial real estate price fluctuations in 2021
 
It seems that the epidemic sweeps the real estate market, the rental price of premises has dropped sharply, so far, the demand for manufacturing factories has not shown any signs of cooling down. A series of foreign enterprises choose Ho Chi Minh City as the place where the factory is located.
 
Therefore, the rental price of factories for production is 5.8%, the occupancy rate is 75%, and the rental price of industrial zones increased by 8% over the same period.
Factory rental price in Ho Chi Minh City includes management fee, repair maintenance fee, service fee
Factories in Ho Chi Minh City always have to optimize everything, including repair cost, management cost, and service cost so that businesses and facility owners can quickly conduct production.
Ready-built factory in Vinh Loc Industrial Park
 
This is a ready-built factory, including business support services. Normally, the rental price will not include other fees but merely the rental price of the premises. Before renting, the owner of the establishment or business needs to pay attention to this clause.

Advantages when choosing to rent a factory in Long An
Long An is one of the locations adjacent to the industrial center, so many businesses choose to rent factories in Vinh Loc Industrial Park (Long An).

In order to ensure compliance with the national technical regulation on noise. The factories are located in the industrial park, far from residential area, so it is suitable for all manufacturing industries such as textiles, mechanics, chemicals. This is also an advantage for establishment owners and investors to choose factories in the industrial park.
 
The industrial ecosystem model develops strongly, minimizing the cost of energy and production materials.

The rental price of industrial real estate in Long An is only about 3.5-3.7 USD/m2, about 1.5 times lower than in Ho Chi Minh City. This is the key point for businesses to balance the company's budget.
 
Technical infrastructure, social infrastructure and criteria for wastewater treatment, electricity supply, fire protection have all been legally approved. Therefore, when choosing a factory in Vinh Loc Industrial Park, enterprises do not need to spend a lot of time on procedures and papers.

Many different factory models such as high-rise factories, ready-built factories with a variety of sizes: 250m2, 300m2, 1000m2, 2500m2, etc.

Find out some industrial park factory rental prices
In addition to the geographical location, traffic status and area, the factory price also depends a lot on the factory structure such as pre-engineered steel buildings or reinforced concrete. The market price of the factory in Long An is in the range of 100-500 million / month (40-100k / m2).

However, not all factories are fully integrated with services. For ready-built factories, businesses need to negotiate the price and time of renting the workshop. If it is possible to commit to long-term production, the enterprise will receive a high discount.

Factory rental prices are always a problem that makes businesses have to worry right in the heart of the epidemic. If you need advice and receive the best price for the production facility, you should choose a factory after considering the above mentioned criterias.