Logistics real estate: Fertile land for large enterprises
The trend of the modern logistics industry is towards automation, cost reduction and energy saving. Accordingly, businesses and investors need to invest carefully, focus on expanding and modernizing warehouses to take advantage of opportunities.
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| Warehouse and factory for rent at Mapletree Logistics Park Binh Duong Project (VSIP II Industrial Park - Binh Duong). Photo: Le Toan |
Benefit from many factors
Amid global geopolitical volatility and rapid changes in manufacturing, Vietnam continues to be an important destination for foreign direct investment (FDI).
Specifically, total registered FDI capital in Vietnam in the first 9 months of 2024 reached nearly 25 billion USD, an increase of more than 11.6%; disbursed FDI capital reached more than 17.3 USD, an increase of 8.9% over the same period last year.
Of which, the processing and manufacturing industry leads in attracting FDI, with a total capital of 15.64 billion USD, accounting for nearly 63.1%. The real estate industry ranks second, with a total investment capital of more than 4.38 billion USD, accounting for nearly 17.7%. Next is electricity production and distribution (1.12 billion USD); wholesale and retail (920 million USD)...
Market research unit Savills commented that Vietnam is an attractive investment destination for foreign investors, thanks to its stable political and economic context and competitive labor costs. In the context of abundant FDI capital, some real estate segments have seen outstanding growth, such as serviced apartments and industrial real estate. Many large corporations in the world have committed and gradually implemented their commitment to turn Vietnam into a major production center in their global chains.
In addition, Vietnam's logistics industry is forecast to continue to grow strongly thanks to the development of e-commerce, because the increase in e-commerce transactions increases the demand for transportation, logistics and delivery. This is both an opportunity and a challenge for the logistics service industry.
According to Ms. Trang Bui, General Director of Cushman & Wakefield, with the boom of e-commerce and the shift of production and investment, Vietnam has become a destination for many businesses in the manufacturing and logistics sectors. This has greatly increased the demand for high-quality logistics real estate. Currently, the occupancy rate in industrial parks and logistics areas in major cities, especially Hanoi and Ho Chi Minh City, is at a high rate, with some places reaching nearly 100%. Demand is expected to continue to increase in the coming time.
Opportunities for large businesses
Thanks to the development of logistics activities, many businesses have returned to profit. For example, ICD Tan Cang Long Binh Joint Stock Company (stock code ILB) has just paid a 2023 cash dividend at a rate of 21.07% (equivalent to shareholders owning 1 share receiving 2,070 VND). This is the highest dividend payment since ILB shares were listed on the Ho Chi Minh City Stock Exchange in 2019.
It is known that Tan Cang Long Binh ICD provides domestic customs clearance port services, warehouse business, including bonded warehouses, cold storage, general warehouses, distribution centers; loading, unloading, storing, distributing import and export goods; customs services; delivery and transportation services... The port area is surrounded by many large industrial parks of Dong Nai province and key traffic routes, being a connection point by road via National Highway 1, National Highway 51, Bien Hoa bypass, Ho Chi Minh City - Long Thanh - Dau Giay expressway. In particular, when the Bien Hoa - Vung Tau expressway is completed, it will create a perfect connection and supply chain between businesses in the region and the seaport system such as Cat Lai, Cai Mep, Phu Huu, Dong Nai...
To stay ahead, warehouse businesses are actively expanding their areas to serve customer needs. Specifically, Mapletree is expanding its warehouse portfolio in Vietnam with large logistics centers in Bac Ninh, Hung Yen and Binh Duong. Two “rising stars” in the modern warehouse market in Vietnam, BW Industrial and NPL Logistics, are holding 22 new warehouses in both the North and South of Vietnam. In particular, BW Industrial will deploy a large project in Dong Nai in 2026, with a floor area of 243,000 m2.
According to experts, infrastructure development and the increase in modern warehouses in Vietnam are encouraging the growing demand of giant manufacturers and modern retail chains in the world. This demand is supported by the positive development of e-commerce trends and the restructuring of global supply chains. Many localities are planning to expand industrial park land and attract investment, such as Long An, Dong Nai, and Bac Giang.
However, Mr. Le Quang Trung, Vice President of the Vietnam Logistics Service Enterprise Association, said that the trend of the modern logistics industry is towards automation, cost reduction and energy saving. Accordingly, to take advantage of opportunities, logistics service providers need to invest carefully, especially in the aspect of digital transformation, to be able to respond and adapt to the market context.
Along with that, businesses and investors need to focus on expanding and modernizing warehouses, planning networks to solve delivery methods and forms, optimizing delivery routes to minimize delivery costs for both businesses and users. In addition, increasing the application of digital transformation to manage and synchronize logistics chains is also an applicable direction in the coming time.
The 2nd Vietnam Logistics Conference 2024 with the theme "Transformation for breakthrough" organized by Dau Tu Newspaper under the auspices of the Ministry of Planning and Investment will take place on October 31, 2024 at JW Marriott Saigon Hotel (82 - Hai Ba Trung, District 1, Ho Chi Minh City).
With the participation of more than 300 domestic and international guests, the Conference will analyze and discuss in depth the most pressing issues of the industry, such as new challenges and trends, modernizing logistics infrastructure, enhancing supply chain efficiency, promoting digital transformation, and developing new logistics business models.
Information about the Forum will be reported online on the online platforms of Investment Newspaper and posted on mass media. Information about the Conference will be updated regularly at: https://logsummit.vir.com.vn.
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