Huge rental demand from the automotive, logistics, and electronics sectors kept the industrial real estate segment strong in the first nine months of 2022.

A report for the third quarter of the year from ACB Securities (ACBS) forecasts that rental prices at industrial parks will continue to rise, especially in the southern region, due to more additional supply in the north than in the south.

In the northern region, the rental price of industrial land in the first half of the year increased 5-12 per cent year-on-year, to $110 per sq m. The rental price of warehouses and ready-built factories rose 0-3 per cent. In Hanoi, Hai Phong, and Bac Ninh, Hung Yen, and Hai Duong provinces, the occupancy rate at industrial parks remained stable, at over 75 per cent, and was over 60 per cent in Quang Ninh, Vinh Phuc, Thai Binh, Ha Nam, and Bac Giang provinces.

In the southern region, industrial land rentals in the first half increased 8-13 per cent year-on-year, to $136 per sq m. Occupancy remains stable, at over 90 per cent in Ho Chi Minh City, Dong Nai, Binh Duong, and Long An, and over 63 per cent in Binh Thuan, Ba Ria-Vung Tau, Tay Ninh, and Binh Phuoc provinces.

Though FDI in the first nine months was down, ACBS maintains its positive outlook for the industrial real estate segment based on a range of favorable factors, such as geographical location. Vietnam’s macro-economic situation is relatively stable compared to elsewhere in the region, its workforce is young and abundant in number, and the country has signed many free trade agreements. Due to limited land area and stable demand from foreign companies, rental prices of industrial real estate are expected to continue to increase, especially in the south.

According to Ms. Trang Bui, General Manager of Cushman & Wakefield Vietnam, the State Bank of Vietnam raising the credit ceiling and pushing capital into production and business will help the industrial real estate market continue to grow strongly in the 2022-2023 period. It is forecast that the warehouse market will benefit during the year-end festive season thanks to a sharp increase in consumption demand.