As the world’s leading manufacturers increasingly establish their presence in Vietnam, the imperative of developing urban centers in close proximity to industrial hubs has become more pressing than ever. This strategic approach not only enhances the appeal of these areas but also aids in the retention of skilled workers.
Troy Griffiths, Deputy Managing Director of Savills Vietnam, predicts that new urban areas with prime locations and modern infrastructure are becoming magnets for an increasing number of professionals, catering to the demands of multinational corporations.
One primary concern among investors is the availability of skilled labor in Vietnam and how to ensure a continuous supply of skilled workers for their operations, the Business Times reported.
In Vietnam, only a handful of industrial parks out of nearly 400 offer comprehensive urban amenities and services that cater to the needs of both investors and workers. Notable examples include the Vietnam Singapore Industrial Park (VSIP) group, a joint venture between Vietnam’s Becamex IDC Group and Singapore’s Sembcorp Industries, with locations in provinces like Binh Duong, Hai Phong, and Quang Ngai.
Vo Van Minh, Chairman of Binh Duong Provincial People’s Committee, shared that Binh Duong province has adopted the “industry-urban-service” development model, creating an attractive living environment and services for the diverse community surrounding the industrial center. “Investors can easily find workers, and workers can secure stable employment in the locality,” noted the Chairman.
Binh Duong, strategically situated in the heart of Vietnam’s Southern Key Economic Region and north of Ho Chi Minh City, has witnessed the development of new urban areas like Tokyu Garden City, a Japanese-style project co-developed by Becamex IDC and Japan’s Tokyu Group. This development is surrounded by major employment centers, including VSIP II and My Phuoc Industrial Park.
In a bid to cater to the increasing number of international manufacturers, other industrial parks, especially in tier 2 cities, need to enhance the level of services they provide to the growing workforce.
“Given labor shortages and limited land availability in prime locations like Binh Duong and Bac Ninh, investors are exploring tier 2 and 3 urban areas in Vietnam for more opportunities” Sophie Dao, Senior Partner at Global Business Services LLC (GBS) told reporter.
Sophie pointed out that emerging provinces are increasingly focusing on industrialization, with manufacturing and R&D projects moving to areas such as Nghe An in Central Vietnam.
Approximately 2.7 million workers are employed in industrial clusters across Vietnam, with nearly 1.2 million in need of housing support.
In response, the government recently approved a plan to construct at least one million low-cost houses for industrial park and low-income workers by 2030. Vietnamese banks are also offering interest-rate credit packages totaling 120 trillion VND to support buyers.
However, the development of social housing in Vietnam is currently slow, with only about 19,500 low-cost housing units completed, according to a Ministry of Construction report in August. The Ministry has proposed various solutions to expedite this process, including completing the legal framework and allocating land for social housing and worker dormitories.
Marc Townsend, a senior consultant at Arcadia Consulting Vietnam, anticipates a shift toward more affordable housing solutions in the next two decades to meet the strong demand.
Additionally, he identified a gap in the market for 2-star and 3-star international brand hotels in tier 2 urban areas, close to industrial parks. “There is a significant demand for hotels and accommodation, not just for workers but also for managers and buyers visiting factories,” he noted.