Industrial real estate will continue to grow

By Duc Minh February 14, 2022 | 7:51 p.m. PT

An aerial view of Tan Tao Industrial Park in Binh Tan District, Ho Chi Minh City in July 2020. Photo by VnExpress/Quynh Tran

Industrial rents are expected to rise 6-10% in 2022 amid growing demand for such properties, according to VNDirect Securities.

Rising public investment in infrastructure should also lead to higher rents. Spending is expected to increase by 20-30% this year, and many major projects are expected to be launched this year.

The rise of e-commerce and the diversification of the supply chain are creating new demand for industrial land for warehousing.

According to the Ministry of Industry and Commerce, Vietnamese e-commerce will grow at an annual rate of 44.9 percent from 2020 to reach a value of $52 billion by 2025.

A report by CBRE Asia estimated that for every $25-27 billion in e-commerce revenue, 350,000 m² of warehousing space would be needed. This means that Vietnam will need at least 700,000 m² of new warehouses by 2025.

Transportation spend accounts for 45-70% of supply chain costs, which means warehouses located near major traffic hubs will be in high demand.

The supply of industrial land is expected to increase by 44,760 hectares in 2022-2025 to meet growing demand, VNDirect said.

The annual profits of warehouses and factories in 2021-2023 would increase by 22 and 14 percent in the south and by 46 and 10 percent in the north, VNDirect estimated.