In the context of Vietnam’s increasingly developing economy and international economic integration, the logistics industry plays a crucial role in the supply chain and transportation of goods. With a significant increase in production and exports, the demand for efficient storage space has risen sharply, creating momentum for the real estate/rent a warehouse rental market.

Overview of the logistics real estate market

In recent years, the logistics industry has become an important sector in the overall economic structure. The logistics supply chain process has become a key factor, covering from the production stage to the stage where goods are delivered to consumers.

Logistics is not only a standalone industry but also directly related to various other sectors such as transportation, rent a warehouse rental, import-export services, customs, taxes, insurance, and retail.

The logistics industry is becoming increasingly important in the global economy

According to the Vietnam Logistics Business Association, the growth rate of the logistics industry in Vietnam in recent years has reached 14% – 16%, with a total scale of about 40 – 42 billion USD per year. This market attracts the participation of about 3,000 domestic enterprises and about 25 leading global corporations, diverse in business forms.

Especially, the recent boom of e-commerce and E-Logistics has created a breakthrough in Vietnam’s logistics industry. Changes in the global and Vietnamese e-commerce models have spurred our logistics industry to improve service quality, gradually transforming into a more professional and efficient system.

Increasing Demand To Rent A Warehouse

According to assessments by experts in Vietnam, the logistics industry has experienced significant growth, especially due to the development of the e-commerce sector. This development has contributed significantly to the increase in demand for logistics real estate.

The development of the e-commerce sector has led to an increased demand for services to rent a warehouse

A survey by Savills Vietnam indicates that the logistics sector in Vietnam is experiencing significant growth. This is attributed to the development of the national economy, along with advancements in manufacturing and e-commerce sectors.

The Vietnam E-commerce Report 2023 by the Department of E-commerce and Digital Economy further clarifies that e-commerce in Vietnam is booming. Revenue from retail e-commerce reached $16.4 billion in 2022, accounting for 7.5% of the total retail sales of goods and services nationwide.

It is projected to reach $20.5 billion in 2023, accounting for about 8% of total retail sales. These figures reflect the increasing allure of e-commerce in the Vietnamese economic context. However, despite this strong growth, the logistics industry in Vietnam still lacks evenly distributed infrastructure, with a focus mainly on major markets.

E-commerce in Vietnam is experiencing explosive growth

According to Thomas Rooney, a senior manager of Real Estate Advisory Services at Savills Hanoi, the logistics market in Vietnam has not fully tapped into its potential. He emphasizes that the current supply has not adequately met the demand, requiring flexibility from investors to introduce new models and optimize existing rent a warehouse rental spaces.

Analyzing the demand for logistics, Rooney emphasizes that the e-commerce industry, in particular, requires large warehouse spaces to store various types of goods and deploy support systems for picking and packaging operations. This underscores the importance of having modern and flexible logistics infrastructure to meet the increasingly complex demands of the market.

The demand to rent a warehouse is increasing as businesses need to store large quantities of goods

Rooney also highlights that in Vietnam, with an improving investment environment and the signing of major trade agreements, it is becoming one of the world’s important manufacturing centers. This creates strong attraction for the investment portfolios of reputable international enterprises. He also values investment in infrastructure and rent a warehouse, emphasizing that this will strengthen supply chains for manufacturing businesses.

In addition, the positive prospects of the e-commerce industry and the increasing demand for fast delivery promise further development of the logistics market in the future, with more efficient and optimized operating models.

As seen recently, Shopee has strategically partnered with two partners in the industrial real estate and logistics sectors to develop warehouse systems. Tiki has also partnered with Unidepot to expand its warehouse network. Lazada, for a long time, has made significant investments in developing its warehouse infrastructure.

Clearly, e-commerce platforms are engaged in an ongoing race to enhance the quality of their logistics supply systems. Hence, the demand to rent a warehouse to meet the storage needs of e-commerce and delivery businesses is continuously increasing.

The demand to rent a warehouse among e-commerce businesses is enormous

Competition among e-commerce businesses is becoming increasingly fierce, driving significant investments from them to ensure efficiency and flexibility in meeting the growing demands for storage and transportation of goods.

>>> See more: Vietnam warehouse rental market: supply soars amidst strong demand

Potential to rent a warehouse for Logistics in Vietnam

In the past, warehouses typically existed in standalone formats with small scales, only catering to the specific needs of individual businesses. However, nowadays, businesses are collaborating with each other or industry-leading enterprises are investing in large-scale warehouses, integrating multiple storage functions into a center called a Logistics Hub. Companies are also adopting green logistics, meaning they integrate renewable energy into the management and operation of logistics centers and warehouses.

The real estate market to rent a warehouse in Vietnam is increasingly developing and expanding

Recently, the real estate market in Vietnam has witnessed an increase in the number of warehouses built to international standards, including height, floor loading capacity, and cargo handling areas. Developers are also focusing on equipping features such as cold storage to serve tenants in the food and various other sectors, as well as sustainable green infrastructure. They are paying attention to implementing large-scale backup electronic systems in high-rise warehouses.

• Industrial Real Estate Supply

Industrial parks and hinterland warehouse areas, especially around major cities like Hanoi, are experiencing high occupancy rates, with some reaching nearly 100%. The industrial real estate supply has yet to meet the development needs of businesses.

Seeing opportunities from the skyrocketing demand of e-commerce and industrial production, investors, especially foreign investors, are actively seeking large-scale warehouse rental projects in key locations adjacent to major economic centers as land becomes increasingly scarce.

>>> See more: The future potential of ready-built warehouse facilities in Vietnam

Renting a warehouse in the Southern Region

Arising from the need for storing goods by businesses, renting warehouses in the Southern region is becoming an effective solution. Rent a warehouse in the South is invested in with high-quality standards, ensuring the safety of goods.

According to a report by the Ministry of Industry and Trade, the distribution of warehouse rental systems in Vietnam is uneven. Over 70% of warehouse areas are located in Southern economic centers. Furthermore, the logistics market in the Southern region is considered more dynamic than the rest of the country.

The Southern region of Vietnam, including Ho Chi Minh City and its neighboring provinces, is strongly interconnected through a system of highways, inland water ports, seaports, and international airports. Ho Chi Minh City, in particular, with its major airports and seaports, plays a crucial role in the region’s transportation and logistics network.

Ho Chi Minh City plays a pivotal role in the Southern region

With favorable location and transportation, the South is witnessing a significant increase in demand for warehouses and industrial land. According to information from CBRE Vietnam, based on prime locations near important logistics centers like Hong Kong. This underscores the importance of the Southern region in Vietnam’s logistics and import-export sectors, and is also a driving force for the development of the industrial real estate market in this area.

The purchasing power in the Southern market is also substantial, creating conditions for the development of retail businesses. Consequently, the demand for warehouse rentals is expected to continue increasing in the future. However, compared to the North, the vacancy rate of warehouses in the South remains high. This is attributed to the large and rapidly developing warehouse inventory in the South.

Conclusion

The demand for rent a warehouse for logistics in Vietnam reflects innovation and dynamic development in the logistics industry. With a significant increase in manufacturing and export activities, businesses are increasingly seeking efficient storage solutions to meet global transportation needs. Vietnam, with its strategic location and development potential, has become an attractive destination for logistics services, creating positive prospects for the future of the logistics warehouse rental market.

>>> See more: 10 essential tips for choosing a warehouse space for lease in Vietnam

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