Ready-built warehouse in Vietnam are witnessing significant changes amidst the backdrop of an increasingly developing and modernizing economy. With the growth of the industrial and commercial sectors, the demand for safe, efficient, and flexible storage space is becoming increasingly important.

Demand for Ready-Built Warehouse in Vietnam

High Demand

Surveys conducted by Savills Vietnam highlight a significant growth in the ready-built warehouse in Vietnam, particularly due to the strong economic development and advancements in production, along with the boom of e-commerce.

The growth of the e-commerce sector drives the demand for warehouse rentals

In the third quarter of 2023, the Northern region saw stability in demand for ready-built warehouses, with a substantial net absorption rate increase of 2.6 times compared to the previous quarter, reaching nearly 90,000 square meters. The diversity of tenants for warehouse rentals has expanded with the participation of manufacturing and distribution groups, not limited to retailers and e-commerce businesses.

The warehouse market in the Southern region is also entering a positive phase, with a net absorption rate of approximately 86,000 square meters. By the third quarter, leasing activities for factories and ready-built warehouses in the Southern region have become more active, with a significant increase in absorption rates, especially in Dong Nai – leading in rental demand.

The thirst for warehouse supply is intensifying, primarily due to increased demand from the e-commerce market. Warehouse supply in Hanoi and Ho Chi Minh City is facing significant pressure as it has reached high levels, and demand continues to rise due to the development of e-commerce.

Investment in infrastructure and warehousing will become crucial, strengthening the supply chain and meeting the storage needs of both the domestic manufacturing market and international manufacturers.

The thirst for ready-built warehouse supply in Vietnam is growing

Abundant Supply

Projections from JLL indicate that the market ready-built warehouse in Vietnam will see significant improvement in the near future, with an expected increase in the supply. According to forecasts, the Northern region will see an additional 700,000 square meters of new warehouses in 2024, doubling the total supply compared to the current level. This poses a positive outlook for the market, especially as expansion extends to neighboring provinces like Vinh Phuc, Bac Giang, and Quang Ninh. The competitive land prices and available land reserves in these areas will facilitate strong market development.

In the Southern region, the market scale is expected to increase nearly 1.6 times by the end of this year. The ready-built warehouse market has recorded over 300,000 square meters of new supply, primarily concentrated in Dong Nai and Long An. However, the occupancy rate in industrial segments has decreased due to the influx of new supply. Particularly, the warehouse segment has seen a sharp decline due to slowing demand, especially in export industries.

The supply of ready-built warehouse in Vietnam is expected to increase in 2024

A comprehensive overview report on the industrial and logistics market in the Southern region for Q4/2022 by Cushman & Wakefield Vietnam highlights these developments. Overall, the future of the ready-built warehouse market in Vietnam looks promising with abundant supply, creating favorable conditions for development and expansion, especially as it extends to neighboring provinces and supports industries with specific demands.

Southern Ready-Built Warehouse Market

Southern ready-built warehouses have a geographical advantage

Cushman & Wakefield’s report continues to assess the ready-built warehouse market in the South, where average rents maintain quarterly stability but record an impressive 2.2% annual increase, reaching $4.4 USD/sqm/month. This stability is a strategy employed by investors to attract tenants amidst increasing competition.

With its strategic location and modern transportation infrastructure, the South is becoming a hotspot with a significant increase in demand for warehouses and industrial land. Information from CBRE Vietnam indicates that the strategic location of the Southern region, close to important logistics hubs like Hong Kong, plays a crucial role in Vietnam’s logistics and import-export industry, driving the development of the industrial real estate market.

Northern Ready-Built Warehouse Market

According to JLL’s assessment, ready-built warehouse projects in the Northern region continue to demonstrate strength due to their prime geographical location and flexible pricing policies. Moreover, investors are flexibly converting usage purposes from warehouses to factories to meet the diverse needs of tenants.

In terms of rental prices, the average asking rent for modern ready-built warehouses in the Northern market reached $4.64 USD/sqm/month in Q3 2023, a slight 1% decrease from the previous quarter but a 5.67% increase compared to the same period last year. This is mainly attributed to competitive pressure from new projects entering the market, focusing on pricing to attract new tenants. Conversely, rental rates at existing projects have shown little significant fluctuation, indicating stability in pricing.

• Gaw NP Industrial – Leading provider of industrial real estate and premium warehouses in Vietnam

Gaw NP Industrial is a leading provider of industrial real estate and premium warehouses under Gaw NP Capital, a joint venture between Gaw Capital Partners, a leading Asian investment fund with total assets of up to $36 billion USD, and NP Capital – one of the experienced real estate investment and development funds in Vietnam. Gaw NP Industrial pioneers in providing comprehensive one-stop solutions for the unprecedented high demand for advanced warehouses from customers in the e-commerce, supply, and manufacturing industries in the Asia-Pacific region.

Gaw NP Industrial is currently developing numerous ready-built warehouse and rental warehouse projects at strategic locations nationwide, such as the GNP Nam Dinh Vu Industrial Center in Hai Phong, and the GNP Dong Van 3 Industrial Center in Ha Nam. All projects by Gaw NP Industrial feature flexible warehouse and warehouse designs, modern infrastructure, ensured security, professional support services, and global connectivity.

– GNP Dong Van 3 in Ha Nam

The GNP Dong Van 3 Industrial Center in Ha Nam has many advantages in terms of location, labor force, and warehouse design. The project is adjacent to National Highway 1A, east of the Cau Gie – Ninh Binh expressway, National Highway 38, and the North-South railway, and is close to the capital city of Hanoi. From here, it is easy to transport goods to nearby areas.

GNP Dong Van 3 in Ha Nam is equipped with many amenities

• Scale: 16 hectares
• Warehouse area: From 9,100 square meters
• Convenience: column-free design, 24/7 security system, fire fighting system, wastewater treatment system…

>>> See more: Ha Nam’s warehouse rental market: a hub for foreign investors

– GNP Nam Dinh Vu

GNP Nam Dinh Vu is a ready-built warehouse and rental warehouse project that broke ground in September 2022. The Nam Dinh Vu ready-built warehouse in Hai Phong has many outstanding advantages, meeting the storage needs of businesses.

GNP Nam Dinh Vu is expected to become the leading solution for warehouse rental

• Scale: 16.9 hectares
• Warehouse area: From 4,896 square meters
• Convenience: column-free design, 24/7 security system, fire fighting system, wastewater treatment system…

>>> See more: 9 key considerations when renting a warehouse in Hai Phong

Conclusion

The future of ready-built warehouse in Vietnam continues to offer promising prospects. With innovation in management and technology integration, these storage facilities not only meet the increasing demands of businesses but also play a crucial role in supporting flexibility and efficiency in resource management.

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

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