INDUSTRIAL LAND RENTS CONTINUE RISING IN SOUTHERN VIETNAM

A bird's eye view of an industrial park in southern Vietnam - PHOTO: H.P

HCMC – Industrial land rents in southern Vietnam are projected to grow by 3-7% annually, while ready-built warehouse rents are forecast to increase by 1.8% per year, according to CBRE Vietnam.

The rise in rents is driven by robust demand from foreign enterprises expanding their production. CBRE also predicts warehouse and factory rents in the south to climb between 0-4% annually over the next three years. Key industrial locations such as HCMC and Long An are experiencing higher rates due to the development of premium projects.

In northern Vietnam, ready-built warehouse rents have remained stable at US$4.6 per square meter per month, while factory rents rose 3.9% year-on-year to US$4.8.

In the south, warehouse rents increased by 4.7% to US$4.6 per square meter per month, and factory rents grew by 2.3% to US$4.9, supported by high-quality developments and heightened investor interest.

Despite rising demand, limited land supply has constrained absorption rates in southern Vietnam, where net absorption of industrial land dropped 52% year-on-year to 265 hectares. Ba Ria-Vung Tau and Long An saw the majority of large transactions.

Demand in the north is being fueled by European manufacturers, while Chinese firms are focusing on expanding production in the south.

The southern logistics market saw nearly 19,600 square meters of net absorption in the fourth quarter of 2024, according to JLL Vietnam. Total leased space for the year reached 199,500 square meters, a 40% increase from 2023, driven by strong domestic consumption.

No new supply was added to the ready-built warehouse market in the fourth quarter, keeping the total stock at two million square meters, a 5.2% rise from a year earlier. Leading developers BWID and Mapletree dominate the market, holding half of the market share. Average rents for ready-built warehouses in the south increased by 1.8% year-on-year to US$4.85 per square meter per month.

Source: The Saigon Times