CBRE Vietnam, in its recent report, predicted an upward trend in industrial land demand and rentals in the time to come.

The bright prospects are explained by the continued expansion of foreign businesses in Vietnam and the rising registrations of new foreign investors.

In addition to electronics, automobile and car part manufacturers, tenants are investors in hi-tech fields, including electric vehicles, semiconductors and green material manufacturers.

An 81 percent occupancy ratio was reported for the north in 2023, while the figure was 92 percent in the south.

The demand for ready-built workshops and warehouses is also on the rise. The total area of ready-build manufacturing facilities in the north reached a peak in 2023, 770,000 sqm. The warehouse rent was stable at $4.6 per sq m per month, while workshops were  $4.8, up 3.9 percent year on year.

In the south, the warehouse rent was $4.6, up 4.7 percent, while workshops were $4.9, up 2.3 percent. 

Though the rents are increasing, demand is still high. In the north, 76 percent of ready-built warehouses and 86 percent of workshops have been leased. In the south, the occupancy ratio in the second half 2023 was 3.8 times higher than the first half thanks to changes in investor policies, while the figure was 85 percent for ready-built workshops.

According to JLL Vietnam, a new supply will be ready this year. The southern ready-built warehouse market will have 340,000 sqm more in 2024 under projects developed by BWID, SLP and Cainiao. Meanwhile, the north will have 322,000 sqm more for lease. The best-known projects include Core5 Hung Yen, and SLP Park Thuan Thanh II.

In the north, Singaporean Frasers Property’s products will be available, including Yen Phong 2C, expanded Yen Phong and Yen My industrial zones (IZs). It is expected that by the end of 2024, the total supply of ready-built workshops will reach 1.4 million sqm in northern provinces. 

According to CBRE Vietnam’s Nguyen Hoai An, the industrial land rent is expected to increase by 5-9 percent per annum in the north and 3-7 percent in the south in the next three years. The rents of ready-built warehouses and workshops are predicted to increase slightly by 1-4 percent.

“Investors in semiconductor and electric vehicle industries have begun investing in Vietnam. With current policies and increased interest by enterprises in hi-tech industries, the demand for industrial real estate will rise in the future,” An said.

Anh Phuong