Numerous global investors are being attracted by emerging industrial areas in many cities and provinces of Vietnam, including the north-central region which entices with competitive land cost and low occupancy rates.
WHA Industrial Zone 1-Nghe An
On the way of becoming a major manufacturing hub for electronics manufacturers, the country has been home to many multinational groups, such as Samsung, Intel, LG, and Microsoft. In addition, groups that have moved operations into Vietnam from elsewhere in the name of diversification include South Korean aerospace manufacturer Hanwha Aero Engines Co., Ltd., automotive components manufacturer Yokowo from Japan, and AirPods manufacturer Goertek.
Moreover, a recent surge in demand for new production plants has made the Vietnam’s industrial property market more vibrant than ever.
Industrial parks in major cities and provinces have been rapidly occupied, with average occupancy rates in key areas in the country’s north and south sitting at over 92 and 80 per cent, respectively, at the end of 2019.
The latest report from CBRE on the last quarter’s industrial real estate showed that the total area of industrial parks in Hanoi and the northern localities of Bac Ninh, Hung Yen, Hai Duong, and Haiphong amount to 13,800 hectares, 9,600ha of which are for rental. Their average occupancy ratio lies at around 78 per cent, with Hanoi, Hai Duong, and Bac Ninh even averaging at about 90 per cent.
As a result, several global investors are planning to expand their facilities further in Vietnam’s northern region and Ho Chi Minh City, as well as other provinces in the north-central region, including in Nghe An.
While the industrial real estate market in the north-central region is in the spotlight, WHA Industrial Zone 1-Nghe An (WHAIZ1-Nghe An) deems itself a smart eco-industrial zone (IZ) with clean and eco-friendly environment, highly evaluated by site inspection teams of international partners. The IZ provides infrastructure and high-quality utilities at international standards to serve the electronics industry’s manufacturing landscape.
In October, Goertek Precision Industry Vietnam Co., Ltd. (Goertek Vina) – a subsidiary of Hong Kong-based Goertek – signed a land lease agreement with at WHAIZ1-Nghe An. According to the agreement, Goertek Vina, which specialises in micro-electromechanical systems, purchased an area of around 40.5ha to develop their factory complex for the production of electronic components for mobile phones, such as Apple’s AirPods.
Jung Dea Yong, representative of Goertek Vina’s Board of Directors said, “Our company selected WHAIZ1-Nghe An for investment due to the park’s demonstrated customer reputation, unique international infrastructure and utilities, and smart eco-friendly solutions.”
Besides Goertek, TALI International Transport and Trade JSC recently signed a land sublease agreement with WHAIZ1-Nghe An. The new facility is hoped to beef up the company’s production capacity for its automotive spare parts and warehousing of mechanical machines and equipment to serve the rising demand from its domestic and international customers in the future.
Retention pond & pump station - Drainage system
WHAIZ1-Nghe An’s success in attracting foreign investors, especially from the electronics sector, is the result of the efforts in offering a comprehensive infrastructure and utilities to its customers. During the design stage, the zone’s investors paid attention to flood prevention and drainage systems, with the latter being one of the unique selling points for such a zone in the flood-battered central lands.
Wastewater treatment plan & retention pond – pump station
During the October storms, the industrial park was not flooded even though its drainage system was not at full capacity, thanks to careful preparations. In addition, its operation team check weather forecasts and predicts the situation, thus helping to control the water level at the site 24/7 and running pumps before, during, and after storms so that full pumping capacity was never required.
David Nardone, group executive of WHA Industrial Development PLC explained, “The flood prevention and drainage system is developed based on studies and recommendations by meteorological experts, who included historical records in their calculation to estimate the maximum precipitation of any particular area. In collaboration with the design team, skillful technicians then implemented the flood prevention system. Thus, we can ensure that no interruptions of operations are likely to occur and offer this to our customers.”
However, the central region weather remains unpredictable. “Because of that, WHAIZ1-Nghe An still holds larger generators ready and implements routine check-ups of the used equipment during the dry season as a preventive precaution. In addition, the system’s operation team is regularly trained properly in controlling the drainage system,” Nardone added.