Viet Nam - Q1 2022

S P OT L I G H T
Savills Research
Industrial Insider

Lego Factory illustrations.

Photo Source: Lego.com

Foreign Direct Investment (FDI) Manufacturing Investments Manufacturing PMI & Industrial Production
 Industrial Market Q1/2022

Border Reopenings
Propel the Industrial Sector in Q1/2022
Despite the pandemic, foreign investors are still confident about
Viet Nam’s economy and investment climate in the new normal,
said the Director of the Foreign Investment Agency (FIA), Do
Nhat Hoang.
Economic policies and a successful vaccination campaign have
created a strong base for foreign businesses to put their trust in
Viet Nam’s market recovery.
The FIA forecasts that the border reopening from 15 March 2022,
the new visa exemption policies, and the shift of European
investors’ capital flows due to the Russia - Ukraine conflict will
support Viet Nam in attracting foreign investment.
Viet Nam’s economy is forecast to grow beyond expectation in
2022 as domestic demand rebounds and foreign direct investment
(FDI) inflows remain stable. GDP grew by 5.0% year-on-year
(YoY) in Q1/2022, according to the General Statistics Office
(GSO). Although higher than the Q1/2021 growth of 4.7% and the
Q1/2020 growth of 3.7%, it is still lower than the 6.9% recorded in
2019.

Foreign Direct Investment (FDI)

FIGURE 1: Foreign Direct Investment (FDI), Q1/2022 On 20 March, total registered FDI
reached US$8.9 billion, equivalent
5.7% to 87.9% compared to the same
2.2% period last year. There were 322
2.3% new projects with registered
capital investments of US$3.21
billion. In Q1/2022, dispersed FDI
reached a five-year high of US$4.42
billion, increasing 7.8% YoY. Binh
Duong had a 29% share with
US$2.3 billion, Bac Ninh had 16%,
30.3% 59.5%
and Thai Nguyen had 10%.
Singapore was the largest
contributor with over US$2.28
billion or 26%, followed by South
Korea with US$1.6 billion or 18%.
Lego’s sizeable manufacturing
investment in Binh Duong pushed
Denmark to the third-largest
Manufacturing & processing Real estate activities contributor with over US$1.3
Science & technology Energy distribution Other billion or 15%.

Source Ministry of Planning and Investment (MPI), March 2022

Lego Factory illustrations.

Photo Source: Lego.com

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 Industrial Market Q1/2022

Manufacturing Investments

Manufacturing and processing accounted for US$5.3 billion (60%) of total inflows. There were 84 new projects with registered capital of US$2.1
billion, and 150 existing projects had increased capital of US$2.8 billion.

TABLE 1: Manufacturing and processing FDI, Q1/2022

NEW PROJECTS 84

NEWLY REGISTERED CAPITAL (US$ BILLION) 2.190

EXISTING PROJECTS 150

ADDED CAPITAL ON EXISTING PROJECTS (US$ BILLION) 2.809

PROJECTS WITH CAPITAL CONTRIBUTIONS 107

CONTRIBUTION CAPITAL (US$ MILLION) 300.61

TOTAL FDI (US$ BILLION) 5.3

Source Ministry of Planning and Investment (MPI), March 2022

FIGURE 2: Newly registered manufacturing investment by region, Q1/2022

1.4% 10.9% By region, the South

dominated with US$1.9
billion or 87.7% of newly
registered manufacturing
FDI, followed by the
North with over US$238
million or 10.9%.

87.7%

North South Central

Source Ministry of Planning and Investment (MPI), March 2022

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 Industrial Market Q1/2022

Manufacturing Investments

FIGURE 3: Newly registered manufacturing investment by province, Q1/2022

By province, Binh Duong
had a 63% share valued at
US$1.38 billion, thanks to
70%
63% Lego’s investment at
VSIP III.
60%

50%

40%

30%

20%

10%
10% 8%
4% 5%
3% 2% 2% 1% 1% 1%
0%
ue

r
g

nh

An

VT

nh

inh

nh

Na

he
on

By country, Denmark was

Na

.H
Ni

Ni

Bi
BR

cN

Ot
ng
Du

ng
TT
ai
y

Ha

the top contributor with

Lo

Ba
Ta

Do
an

Th
nh

Qu

over 60%, followed by

Bi

Singapore and Taiwan with

Source Ministry of Planning and Investment (MPI), March 2022
18% and 6%, respectively.

FIGURE 4: Newly registered manufacturing investment by country, Q1/2022

Other 2%

South Korea 1%

France 1%

BVI 2%

Japan 2%

China 4%

Hong Kong 5%

Taiwan 6%

Singapore 18%

Denmark 60%

0% 10% 20% 30% 40% 50% 60% 70%

Source Ministry of Planning and Investment (MPI), March 2022

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 Industrial Market Q1/2022

Manufacturing PMI
& Industrial Production
FIGURE 5: Manufacturing PMI, Q1/2022 According to Trading Economics, Viet
Nam’s Manufacturing Purchasing
54.7 54.3
Managers’ Index (PMI) dropped to 51.7
60.0 points in March from 54.3 in February.
53.6 53.1 52.1 52.2 52.5 53.7 51.7
50.0 44.1 45.1 Although the index still points to an
40.2 40.2 overall strengthening of business
PMI Points

40.0 conditions, the latest results were the

least marked in the current six-month
30.0 sequence of growth.
20.0 Output fell for the first time in six
months, primarily due to labour
10.0 shortages, as many workers were infected
with Covid-19, and work backlogs
0.0 increased the most since September 2021.
1 21 1 21 1 1 1 1 21 1 2 2 2 The pandemic and the war in Ukraine
-2 r- -2 - l -2 -2 -2 -2 - -2 -2 -2 -2
ar p ay un Ju ug ep ct ov ec n
eb ar delayed deliveries, with the longest lead
M A M J A S O N D Ja F M
times since October. In terms of inflation,
Source Trading Economics, March 2022 input costs had the sharpest increases in
nearly 11 years. Higher oil, gas, raw
material costs and shipping prices drove
increases.
FIGURE 6: Industrial production, Q1/2022
Viet Nam's industrial production rose
by 8.5% YoY in March 2022, after an
25.00 upwardly revised 9.2% gain in February,
the steepest increase since last May.
20.00 Despite the pandemic, this represents the
fifth straight month of increases in
15.00 industrial output. Manufacturing
production growth was 9.6% compared to
10.00 9.7% in January. In Q1/2022, industrial
output grew by 6.4% YoY.
%

5.00
Manufacturing and processing
0.00 increased 7.8% YoY. Key industries with
-2
1
-2
1
-21 - 21 -2
1
- 21 - 21 -2
1
- 21 -2
1
-2
2
-2
2
-2
2 large increases in the first quarter were
l
-5.00 M ar pr ay un Ju ug ep ct ov ec n b ar clothing (24.1%); machinery and
A M J A S O N D Ja Fe M
equipment (16.2%); metal production
-10.00 (10.1%); electronics, computers, and
optical products (9.4%); and other
Source Trading Economics, March 2022 non-metallic mineral products (8%).

TABLE 2: Biggest manufacturing investments, Q1/2022

COMPANY NATIONALITY INVESTMENT CAPITAL (US$) INDUSTRIAL PARK PROVINCE

Lego A/S Denmark 1.3 billion VSIP III Binh Duong

Libra International
Singapore 210 million Thanh Cong Tay Ninh
Investment

Coca-Cola Vietnam Singapore/US 136 million Phu An Thanh Long An

Shinkong
Taiwan 85 million Phu My 3 Ba Ria – Vung Tau
Synthetic Fibers

Teijin Frontier Co. Ltd. Japan 40 million Tien Hai Thai Binh

5
 Industrial Market Q1/2022

Successful
Industrial Transactions in Q1/2022
Framas Factory Lease Fuchs Long-Term Land Lease

Savills brokered a 20,000 m2 factory lease between framas and
KTG Industrial in February. The leading German injection
moulding player took on a 20,000 m2 ready-built property at KTG
Industrial Nhon Trach 2 in Dong Nai Province.
Signed at the end of Viet Nam’s most serious Covid-19
outbreak, this ten-year lease represents the continued strength of
the Vietnamese economy and the industrial real estate sector.
Savills Viet Nam brokered a land lease between Fuchs and Phu
My 3 Specialized Industrial Park.
In March 2022, Savills supported Fuchs, a leading German
lubricants player, in expanding its Vietnamese operation with a
20,000 m2 long-term land lease at Phu My 3 Specialized Industrial
Park in Ba Ria - Vung Tau Province.

This deal indicates an interesting shift in the
market, where occupiers are leasing large
ready-built facilities. Previously, requirements
of this size would warrant a long-term land
lease and construction by the tenant, but
we’re seeing companies select quick, flexible,
and less capital-intensive routes of renting
ready-built assets.
This 55-year lease emphasises the growth of
Ba Ria - Vung Tau’s industrial sector and the
need for multinational tenants to consider
alternative locations. Not only does the area
offer competitive rents and infrastructure
suited for medium to heavy industry, but it
also provides access to a growing seaport
cluster.

John Campbell, John Campbell,

Associate Director, Head of Industrial Associate Director, Head of Industrial
Services at Savills Viet Nam Services at Savills Viet Nam

DEAL Factory Lease DEAL Land Lease

TENANT framas TENANT FUCHS Group

SIZE (M2) 20,000 SIZE (M2) 20,000

LEASE TERM 10 years LEASE TERM 2077

NATIONALITY Germany NATIONALITY Germany

INDUSTRY Injection Moulding INDUSTRY Lubricant products

LANDLORD KTG Nhon Trach 2 LANDLORD Thanh Phu My 3

ADDRESS Nhon Trach 2, Dong Nai ADDRESS Phu My 3 IP, BR-VT

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 Industrial Market Q1/2022

New Projects & Q1/2022

Market Updates

Photo Source: CapitaLand Website, 2022 Photo Source: Deep C IZ, 2022

CapitaLand Development signed a BW Industrial Development JSC

MOU for a US$1 billion investment acquired land developed by DEEP
in Bac Giang. C Industrial Zones.
The MOU outlines the plan for CapitaLand Development’s In January, BW Industrial Development JSC announced its latest
first industrial and logistics park and township acquisition of approximately 74,000 m2 of land in Bac Tien Phong
development in Viet Nam. Industrial Zone (Quang Ninh), developed by DEEP C Industrial
Zones. It is BW’s first property in Quang Ninh and its third
collaboration with DEEP C Industrial Zones. BW is diversifying and
expanding its presence across Northern Viet Nam.

Photo Source: VIR, 2022

LOGOS Viet Nam Logistics Venture announced its fourth acquisition in

Viet Nam.
In February, LOGOS and Manulife Investment Management announced a joint-venture partnership to acquire an 11-ha, build-to-suit (BTS)
modern logistics warehouse that provides over 116,000 m2. The property is valued at over US$80 million and is fully committed to a global
occupier with an initial five-year lease term.

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 Industrial Market Q1/2022

KCN Vietnam broke ground at Phu An

Thanh Industrial Park, a premium
industrial facility in Long An Province.
The 13.4-ha project will have two phases that will provide a total leasable
area of 90,516 m2. More than 45,000 m2 will be handed over in early
Q4/2022. It is approximately 1 hour from the HCMC CBD and, therefore,
has excellent access to Tan Son Nhat International Airport, Cat Lai Port,
and Long An Port. In line with KCN Vietnam’s environmental
commitment, solar panels will be installed. The company has also
invested in designing an innovative hybrid product, providing flexibility
and multi-functional facilities.

Photo Source: KCN Vietnam Website, 2022

Photo Source: Gaw NP Industrial Website, 2022 Photo Source: TNI, 2022

GNP will accommodate a diversified TNI Holdings announced the launch

supply chain and the demands of
global manufacturers.
Gaw NP Industrial (GNP) broke ground in December 2021 at its second
ready-built factory (RBF) project, GNP Yen Binh 2 Industrial Centre.
The 16-ha project will cater to the changing demands of global
manufacturers and producers and will ensure smooth and optimised
operations. This second facility follows the successful 13-ha GNP Yen
Binh 1, which was fully occupied before its completion last June.
of a new industrial park in Q3/2022.
Gia Loc Industrial Park, developed by TNI, located next to the Ha Noi –
Hai Phong Expressway, Hai Duong Province, is rising as one of the most
sought-after industrial parks in Northern Viet Nam.
The IP comprises 198 hectares of land. It is boosted by its strategic
location, which enables convenient connection to Noi Bai International
Airport; Hai Phong Dinh Vu seaport; Quang Ninh – Cai Lan deep
seaport and surrounding key cities and provinces.

For more information about this report, please contact us

Research Industrial Services

Troy Griffiths John Campbell

Deputy Managing Director Associate Director,
Head of Industrial Services
+84 933 276 663 +84 986 718 337
TGriffiths@Savills.com.vn JCampbell@Savills.com.vn

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