Industrial land rental prices still have room to increase in the next 2 years

It is expected that rental prices will increase at the level of 6 - 10%/year in the Northern region and 4 - 8%/year in the Southern region.

A survey by CBRE Vietnam Co., Ltd. shows that positive demand from many industries and many nationalities helps boost rental growth in many localities. At the same time, rental prices for ready-built warehouses are forecast to increase slightly by 2-4%/year in the next two years. New projects with good technical specifications and convenient locations will have rental prices higher than the market average.

In the three quarters of 2023, tenants from China, Vietnam, Japan, the US and the European Union are the active investors looking for industrial land and warehouses in the Vietnamese market; accounting for about 70 - 80% of the number of leasing inquiries to CBRE in both the South and the North.

Assessing future trends, Ms. Nguyen Hoai An - Senior Director of CBRE Vietnam - Hanoi Branch commented that Vietnam's industrial real estate market will continue to have many changes with the expectation of growth in foreign direct investment (FDI), the shift and diversification of industries of FDI enterprises.

In particular, the trend will focus more on the high-tech sector. At the same time, more and more businesses and tenants are including sustainable development goals in the criteria for choosing locations to develop factories and rent warehouses. This will be a factor promoting the development of new supply of green buildings in the future - Ms. An analyzed.

Not only industrial real estate, Cushman & Wakefield Vietnam also believes that the logistics market will be the "golden goose" in Vietnam because this is the destination - the top choice of global investors in the logistics industry in the Asia Pacific region.

Cushman & Wakefield’s annual survey of top global clients in 2022 found that India was ranked by more than 60% of respondents as their preferred emerging market (excluding mainland China) to invest in. On a first- and second-preference basis, Vietnam was the chosen emerging market, capturing nearly 80% of the votes, far ahead of India’s 75%, the firm cited.

Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam, commented that in the last months of the year, when demand from the retail market is forecast to increase by many times, the "thirst" for factory and warehouse supply will become even more intense.

Currently, the total supply of warehouses in Hanoi and Ho Chi Minh City is only 2,022,000 m2 and 5,130,000 m2 respectively. Industrial parks and warehouse logistics in large cities, especially Hanoi and Ho Chi Minh City, are having high occupancy rates, with some places reaching nearly 100%. Demand will increase in the coming time. Especially when supply cannot meet demand, increasing competitive pressure on retail and transportation businesses.