A NEW TREND OF
INDUSTRIAL REAL ESTATES
The ready service space in KIZUNA 3 – Long An
The latest report released by Jones Lang LaSalle (JLL) Vietnam revealed that the industrial land resources for lease are becoming scarce. Total land area for lease in the South of Vietnam (including HCMC, Long An, Binh Duong, Dong Nai, and Ba Ria – Vung Tau) hit 25,045 hectares in Q2/2020. Remaining land resources for lease in some available industrial parks in HCMC are still delayed due to difficulties in compensation,
site clearance, especially in COVID-19 outbreak period.
The reality of this can be seen in areas of rising occupation rate in available industrial parks and climbing land rental regardless of the epidemics. The report recognized that in Q2/2020, investors have increased the land rental up to 106 USD/m2/lease term on average, climbing up to 9.7% compared to last year. The workshop factory rental remains stable, varying within the range of 3.5 – 5 USD/m2/month, due to the short term lease from 3-5 years and tenants are also aware of the impact caused by the epidemics. Rental activities are mainly originated from Vietnamese investors.
In fact, the scarcity of industrial land resources in key urban areas or bordering areas has been brought up recently. According to an investor specialized in workshop for lease, this is why the land rental has been continuously increased over the past years. In 2012, land rental was just 63 USD/m2 and by 2018 this number was increased to 120 USD/m2.
The ready service space is applied BlueScope Lysaght’s steel solutions as: LYSAGHT® BONDEK® II, LYSAGHT®
Roofing & Walling, LYSAGHT® PROBUILD™ with materials: ZINCALUME® ULTRA Activate™ steel and COLORBOND® ULTRA Activate™ steel
As a business operator in Long An, Ms. Lam Dieu Tam Hieu, Deputy General Director of KIZUNA JV also agreed that the land resources in industrial parks of HCMC’s neighboring districts (such as Can Giuoc – Long An province) are becoming relatively limited, industrial park land rental prices have been increasing since 2018, but factory rental prices have not changed. Therefore, in order to exploit the remaining land resources effectively, the ready service space is determined to launched their final lot of KIZUNA 3 Service Workshop Area to further provide production workshop to existing and new customers.
“Development of ready service space is essential in the context of increasingly restricted industrial land resources, especially positions bordering with key urban areas. This helps the investors to successfully exploit the land resources, making use of urban utility facilities and traffic hub”.
Ms. Lam Dieu Tam Hieu, Deputy General Director of KIZUNA JV
In order to effectively utilise the land resources, from the start of 2015, HCMC guidelines have been initiated to launch pilot construction of the ready service space in certain local industrial parks (the Decision No. 1026/QD-UBND on pilot launch of the ready service space model at export processing zones, industrial parks and high technology parks in the span of 2015 – 2018). This model was also applied in Hiep Phuoc Industrial Park; Tan Thuan Export Processing Zone; High Technology Park of District 9, etc. Moreover, each workshop area consists 3-8 floors, construction area of 10,000 – 40,000 m2. Therefore, some ready service space areas are built with dozens of ready service space areas are built with dozens of ready service space meters to be operated.
The ready service space model has been globally applied in Taiwan, China, Singapore, Thailand, Korea and Japan, etc. Especially, the workshops are equipped with advanced technology to operate and manage, to bring effective performance to the investors.
The ready service space is applied BlueScope Lysaght’s steel solutions with materials as: ZINCALUME® ULTRA Activate™ steel and COLORBOND® ULTRA Activate™ steel
The ready service space is an inevitable trend of industrial real estate industry, especially in Industry 4.0 era nowadays, said Ms. Lam Dieu Tam Hieu.
This workshop doesn’t just solve operation problems of increasingly scarce industrial land resources in big
cities or its bordering areas, but also satisfies the demand on production spaces and rental for various players ranging from super-small, small to medium size.
The ready service space model is very suitable for enterprises that are involved in industries,
advanced technology application production, software production, light industry, medical supplies and equipment, health care products… “The workshop position may be selected in basement or higher floors, to be leased with 100 m2 or hundreds of square meters, etc., depending on production load and area scale”,
said Ms. Hieu.
However, as a new and modern approach in the fields of Vietnam industrial real estates, the ready service space needs to be researched and developed by professional organizations specialized in industrial building fields to ensure the tenants’ production safety and efficiency.
Production workshop in the upper floors must be examined closely and restricted if the construction works does not meet standard with factors such as floor load, production height, column spans inside the workshop, etc.
Moreover, extra caution is required to the sizes of machinery and cargo, traveling flow of workers, emergency exit, etc., when the workshop is under constructed and built.
It is also crucial to invest in the buildings’ general security system, cargo and passenger elevators, etc., and to make sure it is fully functional and running by an experienced technical team as this is important in developing a factory that is not on the ground floor.
The ready service space is applied BlueScope Lysaght’s steel solutions as: LYSAGHT® BONDEK® II, LYSAGHT® Roofing & Walling, LYSAGHT® PROBUILD™ with materials: ZINCALUME® ULTRA Activate™ steel and COLORBOND® ULTRA Activate™ steel
Workshop areas that have less than 5 floors with bearing structure and steel cover, especially suitable in Vietnam at the current stage due to the influence of technical conditions, meeting the requirements of production space but still ensuring fire safety, fire escape, management and operation of the building… Through this, experience and knowledge is gained through managing and operating low-rise factories, in the future, Vietnam can to develop ready service space model with over 5 floors to match other countries such as Japan, Korea and Singapore.
With 40 years of experience in developing industrial real estates of founder and an ocean of knowledge acquired from Singapore, Japan and Korea models, KIZUNA determines to invest in such first KIZUNA Ready Serviced Space with 4 floors by the most cutting-edge international standardized construction materials, plants and equipment, is ready to hand over in November 2020, to welcome a new generation of FDI inflows to shift production from China to Vietnam due to the Covid crisis. All workshops are applied steel frame, roofing and walling solution from BlueScope Lysaght. Each floor cluster is provided with separate high-duty elevator; each workshop is equipped with automatic Sprinkler, automatic firefighting and prevention system, camera, etc. Obviously, with aforesaid hardware, this KIZUNA Ready Serviced Space is also supported by a series of infrastructure, utilities and available services such as peer-to-peer IT infrastructure of hi-tech park, two EVN power supplies or share resources such as sales center, canteen, temporary terminals, forklift, etc. “The investment costs of KIZUNA – Ready Serviced Space alone worth over VND 700 billion, excluding management and operation costs”, unveiled by Ms. Hieu.
Ms. Lam Dieu Tam Hieu, Deputy General Director of KIZUNA JV shared that:
“KIZUNA – Ready Serviced Space is applied Lysaght Roofing and Walling solution from BlueScope Lysaght such as: Lysaght® Klip-Lok® Optima™, Lysaght® Spandek®Optima™, Lysaght® Multiclad™ with materials: Zincalume® Ultra Activate™ steel, Colorbond® Ultra Activate™ steel helps to improve long life of works. Particularly, rooftop solar energy system may be installed without screwing, minimizing water leaking, saving workshop maintenance cost.
We still applied LYSAGHT® BONDEK® II steel decking solution for the ready service space which is facilitated to exceed long span, offering effective production space for users. In addition to optimal fire resistance design for the slab, LYSAGHT® BONDEK® IIis used to replace traditional formworks, bottom layer of reinforced for composite slab and act as finishing ceiling materials. It may successful shorten the construction period and floor reinforced concrete cost, reducing investment cost for Kizuna, offering the very competitive renting warehouse/ factory against other investors in the same high-end segment.”