According to CBRE’s report, the industrial land market has a positive occupancy rate. The northern region recorded an average occupancy rate of 81%, while the southern region reached 92%. The absorption area in the northern market reached a five-year high of over 800 hectares, up 37% year-on-year. The southern market, due to relatively limited industrial land fund, had an absorption area 32% lower than the same period last year, reaching about 500 hectares.
In the warehouse market, ready-built factories also recorded positive growth with the highest new supply coming online in the North ever, with a total of 770,000 m2 of new warehouses/built factories. In the South, the amount of new supply also reached the same level as the North, although this was lower than the previous three years.
In the North, the rental price of ready-built warehouses was recorded to remain stable at 4.6 USD/m2/month. Meanwhile, the average rental price of factories was 4.8 USD/m2/month, up 3.9% year-on-year.
Warehouses and ready-built factories have maintained high absorption rates in recent times.
Similarly, in the Southern market, the rental price of ready-built warehouses is currently at USD 4.6/m2/month, up 4.7% year-on-year. The rental price of ready-built factories in this area is at USD 4.9/m2/month, up 2.3% year-on-year. The average rental price increased due to new high-standard projects in Ho Chi Minh City and Long An being completed and put into operation during the year.
Despite the continuous increase in supply in recent times, the occupancy rate in both regions has remained stable. With demand remaining high, in the next 3 years, industrial land rental prices are expected to increase by 5-9%/year in the North and 3-7%/year in the South.
Positive demand from industrial sectors has helped boost rental growth in many localities. Meanwhile, rental prices of ready-built warehouses/factories are forecast to increase slightly from 1% - 4%/year in the next three years. In particular, in the past year, many new investment sectors have emerged in Vietnam such as the semiconductor industry and electric vehicle industry. This is the beginning for many other sectors to invest in Vietnam in the future, leading to the strong development of industrial real estate.
This growth of industrial real estate is also affected by the continuous FDI inflow into Vietnam. Statistics from the Foreign Investment Agency - Ministry of Planning and Investment show that as of December 20, 2023, the total registered FDI in Vietnam reached nearly 36.61 billion USD, an increase of 32.1% over the same period. The realized capital of foreign investment projects is estimated at about 23.18 billion USD, an increase of 3.5% compared to 2022. This is a record disbursement level to date.
Industrial real estate will increase slightly in price due to high demand.
Of the total registered capital, newly registered capital reached nearly 20.19 billion USD, up 62.2% over the same period; the number of newly registered projects also reached 3,188 projects, up 56.6%. Thus, both new projects and newly registered capital increased sharply. This is a very noteworthy point.
With the large amount of FDI capital flowing into Vietnam continuing to increase, foreign enterprises will have a high demand for production and warehouse space to serve production and business. This is a source of demand and has only recorded an increase, not a decrease, over the past time.
Commenting on the industrial real estate market, many opinions say that this type will develop further in 2024. At the same time, industrial real estate will continue to lead the real estate market, bringing the market into a recovery cycle in the coming time.
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