FTZs an asset for industrial real estate

Vietnam has begun piloting a free trade zone model in Danang, Haiphong, and Ho Chi Minh City, raising expectations for the emergence of a new growth structure for the country's industrial real estate market.

- By Bich Ngoc

(Photo: Le Toan)

Ho Chi Minh City is expected to issue a decision on establishing the Cai Mep Ha free trade zone (FTZ) in the second quarter, covering nearly 3,800 hectares and directly connected to the Cai Mep-Thi Vai deepwater port cluster, Long Thanh International Airport, and major trans-Asian trade corridors.

The Cai Mep Ha general and container port project was approved at the end of January by Ho Chi Minh City People's Committee, with total investment exceeding $1.95 billion. This will be a key component closely linked to Cai Mep Ha FTZ, supporting the development of an integrated ecosystem comprising transport hubs, logistics warehousing, and industrial-urban-service functions for the whole of Ho Chi Minh City.

Meanwhile, in Danang city, authorities in March approved a joint venture between Hateco Group and APM Terminals to invest in Lien Chieu Container Port's berth 1. Earlier, the same consortium had invested in and operated berths 5 and 6 at the Lach Huyen Port. In parallel, infrastructure works for Functional Zone 5 were launched in August last year by Sun Group.

In Haiphong in the north, Vingroup is developing the Nam Do Son Port and Logistics hub, a megaproject with total investment estimated at more than $14 billion.

Meanwhile, Vinhomes' Nam Trang Cat Industrial Park (IP) has completed investment policy approval and is entering site preparation, while Tan Trao IP is expected to begin technical infrastructure construction this year.

At the same time, Tien Lang 1 IP, developed by Asia-Pacific Sustainable Green Development JSC and launched in January, has moved into the construction phase.

An FTZ is a spatial economic development model offering a higher degree of liberalisation than traditional IPs, where manufacturing, warehousing, transshipment, international trade, logistics, and supporting services operate under more flexible frameworks for tariffs, customs, and investment procedures.