Taiwanese firms are keen about investing in Vietnam to avoid US-China trade tensions and other risks, although the COVID-19 pandemic is disrupting the pace, PricewaterhouseCoopers (PwC) Taiwan said in a report on Monday.
Some firms have put on hold their investment plans in Vietnam amid the pandemic, resulting in a 20.9 percent decline in foreign direct investment to US$8.6 billion during the January-to-March period, PwC Taiwan said.
That is because firms in Vietnam have been hit by supply chain disruptions and order cancelations after major export markets shut down all nonessential businesses to combat the virus, it said.
Vietnam has instituted strict isolation measures, which have slowed down commercial property transactions and lengthened negotiation periods, PwC said.
However, buying interest remains strong while property prices hold stable, it said.
Buyers from Taiwan, South Korea, Japan and Singapore have shored up demand for industrial properties in Vietnam, it said.
Land costs in northern Vietnam averaged US$99 per square meter last quarter, an increase of 6.5 percent from a year earlier, while rates for similar sizes of land in Ho Chi Minh City require up to US$200, PwC Taiwan said, citing official data from Vietnam.
Occupancy rates at Vietnamese industrial parks hover at about 75 percent, the consultancy said.
The pandemic underscores the importance and necessity of having diversified manufacturing sites, PwC said.
Some European and US companies have asked contract manufacturers to set up plants outside of China to rein in overconcentration risks, it said, adding that Vietnam is benefiting from the supply chain realignment.
Vietnamese authorities have voiced plans to offer tax credits and other measures to mitigate the effects of the pandemic on foreign firms, PwC said.
The country might recover its full manufacturing capacity next quarter if the outbreak comes to a quick end, it said.
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