A lack of warehousing and a growing number of international companies coming to Vietnam has put pressure on the country’s logistic services and the development of warehouse and industrial real estate.

The Vietnamese Government has been encouraging companies to come to Vietnam, especially in high value-added industries, technology and R&D, renewable energy, and smart agriculture. Demand for warehouse and industrial real estate will therefore continue to head upwards for the foreseeable future.

In regard to industrial parks and logistics in Ho Chi Minh City and southern provinces, the market for ready-built factories and warehouses is seeing positive growth, with supply reaching 4.14 million sq m and 3.52 million sq m of floor space, respectively, according to Cushman & Wakefield Vietnam.

In the north, meanwhile, JLL Vietnam has noted that in the first quarter of this year, occupancy in ready-built factory sector was 98 per cent, with rental prices of $4.7 per sq m per month, up 3.5 per cent compared to the same period last year.

According to Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam, it is estimated that about 23,000 ha of industrial land will enter the market. The factor driving the market is that investment in Vietnam’s manufacturing sector has grown significantly in recent years, thanks to lower costs compared to China, with average export turnover rising 11 per cent a year from 2017 to 2021.