1H 2024 Overview

In the first half of 2024, the market did not witness any new industrial park projects coming into operation. Therefore, the absorption of industrial land mainly came from the land fund in existing industrial parks. The demand for land, ready built factories and warehouses remained high due to the booming influx of FDI capital and the growing demand for online shopping.

The business performance of listed developers in Q1/2024 is highly differentiated. Companies that have completed land handovers and new industrial land leases, with promising medium and long-term prospects, have reported favorable business results and stock price movements.

2H 2024 Outlook

Regarding the industry’s demand prospects, we believe that Vietnam still has significant potential to attract foreign investment based on: (1) the nation’s competitive advantages in attracting FDI capital flows; (2) benefiting from the “Friend-shoring” investment trend and the “China +1” strategy amidst the trade tensions between the U.S. and China heating up again; (3) increasing rental demand from the capital reallocation plans of multinational corporations; and (4) the government’s efforts to improve the legal environment and investment incentives to attract both domestic and international manufacturers.

From the second half of 2024 to the first half of 2025, the scarcity of new supply will persist. The advantage in attracting new tenants will belong to developers with substantial ready-to-lease commercial land reserves.

However, the supply bottleneck will be alleviated in the medium and long term thanks to the large industrial land fund and rubber land converted to industrial land supplemented according to Decision 227/QĐ/TTg, which amends land use targets, opening up a new supply trend in both Northern and Southern regions. Additionally, policies and laws passed in the first half of 2024 help establish regulations, amendments, and guidelines for project implementation, resolving legal bottlenecks in project development.

Stock Pick: IDC, SZC