Southern industrial real estate market vibrant in Q3

CEO of Cushman & Wakefield Trang Bui said after about 2-3 years without new industrial land supply in the southern key economic region, the third quarter of 2023 witnessed new supply from Long An with the entry of the Nam Tan Tap Industrial Park developed by Saigontel, which contributed roughly 171ha to the market.

The average occupancy rate reached nearly 82%, equivalent to a net absorption of 116ha, representing a quarterly increase of 66%. Long An and Ba Ria - Vung Tau provinces recorded the highest net absorption rates, with 59% and 28%, respectively.

It was attributed to the recovery of industrial production sector.

Cushman & Wakefield forecast that between now and 2026, the future supply is estimated at around 5,700ha, mainly coming from Binh Duong, Dong Nai, Long An, and Ba Ria - Vung Tau provinces. Amid high demand, land rental prices are expected to continue the upward trend.

It said the outlook for the ready-built factory market will remain vibrant, with approximately 2.5 million sq.m of ready-built factory space introduced to the market from late 2023 to 2026, with the participation of both domestic and foreign investors. The absorption rate is also expected to continue increasing in the coming quarters, benefiting from the relocation of manufacturing facilities from China to Vietnam.

The ready-built warehouse sector also noted the entry of two new projects into the market in Dong Nai and Binh Duong provinces, with a total area of some 110,000 sq.m.

John Campbell, Associate Director and head of the Industrial Services Department at Savills Vietnam, said as of 2023, Vietnam has a total of 397 IPs covering a total land area of 122,900 ha. Of which, 292 IPs covering more than 87,100ha are operating, while 106 others are under construction with a total area of 35,700ha.

IPs across the country have high occupancy rates of over 80%. The northern provinces record 83% while the southern region 91%.

According to him, the scarcity of land supply and rising land prices are driving the trend towards developing multi-story factories and warehouses outside Ho Chi Minh City, in order to optimise land investment costs./.