Free Trade Zones

Demand for logistics real estate increases sharply: Savills Vietnam | Company

Nam Hai Dinh Vu port in Hai Phong city. (Photo: VNA)
This is one of the factors causing the demand for logistics real estate to rise sharply, he said.

A survey by Savills Vietnam has shown that the logistics industry in Vietnam is growing significantly due to the development of the national economy and the manufacturing and e-commerce sectors.

According to an Emerging Markets Logistics Index report released earlier this year by Agility, a leading provider of logistics and transportation services in 2022, Vietnam ranks 11th among the top 50 emerging markets in the world, only behind Indonesia, Malaysia and Thailand in the Association of Southeast Countries. Asian nations.

The Vietnam transportation and logistics market is expected to grow at a compound annual growth rate (CAGR) of 7% during the period 2021-2026. The Vietnamese government encourages manufacturing enterprises and attracts investment by establishing industrial and economic zones. Despite the challenges of the Covid-19 pandemic, this industry is still thriving thanks to the opportunities created by domestic production and consumption, economic growth, free trade agreements (FTAs) and the e-commerce boom.

According to Matthew Powell, director of Savills Hanoi, Vietnam is a destination for many companies in the manufacturing and logistics sectors, especially before the development of the e-commerce industry. With this comes an increased demand for high quality industrial real estate.

Currently, many companies are having difficulty finding locations for their factories and warehouses. Industrial parks and warehouse logistics, especially around big cities like Hanoi, have high occupancy rates even up to almost 100% in many places. The supply of industrial real estate is decreasing to keep up with business demand.

This provides an opportunity for international property developers to invest in Vietnam, he said.

Many investors are seizing the opportunity to launch products suitable for the market, therefore, the supply shortage will soon be resolved in the coming months, Powell said.