A fertile ground for large businesses.

Logistics real estate: A fertile ground for large businesses.

The trend in modern logistics is towards automation, cost reduction, and energy saving. Accordingly, businesses and investors need to invest carefully, focusing on expanding and modernizing warehouses to take full advantage of these opportunities.

Warehouses and factory spaces for rent at Mapletree Logistics Park Binh Duong (VSIP II Industrial Park – Binh Duong ). Photo: Le Toan

Benefiting from multiple factors

Amidst global geopolitical shifts 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 nine months of 2024 reached nearly US$25 billion, an increase of over 11.6%; disbursed FDI capital reached over US$17.3 billion, an increase of 8.9% compared to the same period last year.

Of these, the manufacturing industry led in attracting FDI, with a total capital of US$15.64 billion, accounting for nearly 63.1%. The real estate sector ranked second, with a total investment of over US$4.38 billion, accounting for nearly 17.7%. This was followed by electricity production and distribution (US$1.12 billion); wholesale and retail trade (US$920 million)...

According to market research firm Savills, Vietnam is an attractive investment destination for foreign investors, thanks to its stable political and economic environment and competitive labor costs. Amidst abundant FDI, several real estate segments have experienced outstanding growth, such as serviced apartments and industrial properties. Many large global corporations have committed to, and are gradually implementing, the goal of making Vietnam a major manufacturing hub within their global supply chains.

Furthermore, Vietnam's logistics industry is projected to continue its strong growth thanks to the development of e-commerce, as increased e-commerce transactions lead to higher demand for transportation, logistics, and delivery services. This presents both opportunities and challenges for the logistics service industry.

According to Ms. Trang Bui, General Director of Cushman & Wakefield, with the boom in e-commerce and the shift in manufacturing and investment, Vietnam has become a destination for many businesses in the manufacturing and logistics sectors. This has significantly increased the demand for high-quality logistics real estate. Currently, occupancy rates in industrial parks and logistics areas in major cities, especially Hanoi and Ho Chi Minh City, are high, reaching nearly 100% in some places. Demand is expected to continue to increase in the coming period.

Opportunities for large businesses

Thanks to the development of logistics activities, many businesses have returned to profitability. For example, Tan Cang Long Binh ICD Joint Stock Company (stock code ILB) recently paid a cash dividend for 2023 at a rate of 21.07% (equivalent to 2,070 VND per share). This is the highest dividend payout 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 inland customs clearance port services, warehousing business including bonded warehouses, cold storage, general warehouses, distribution centers; loading, unloading, storage and distribution of import and export goods; customs services; freight forwarding and transportation services… The port area is surrounded by many large industrial zones of Dong Nai province and major transportation routes, connecting by road via National Highway 1, National Highway 51, Bien Hoa bypass, and the 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 space to meet customer demand. Specifically, Mapletree is expanding its warehouse portfolio in Vietnam with major logistics centers in Bac Ninh, Hung Yen, and Binh Duong. Two rising stars in Vietnam's modern warehousing market, BW Industrial and NPL Logistics, currently hold 22 new warehouses in both northern and southern Vietnam. Notably, BW Industrial will launch 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 growing demand from giant manufacturers and modern retail chains worldwide. 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 Chairman of the Vietnam Logistics Services Business Association, believes that the trend in the modern logistics industry is towards automation, cost reduction, and energy saving. Therefore, to take advantage of this opportunity, businesses providing logistics services need to invest carefully, especially in digital transformation, in order to meet and adapt to the market context.

Furthermore, businesses and investors need to focus on expanding and modernizing warehouses, planning networks to address delivery methods and optimize route delivery to minimize delivery costs for both businesses and users. In addition, strengthening the application of digital transformation to manage logistics chains synchronously is also a promising direction for the future.

Vietnam Logistics Conference 2024

The 2nd Vietnam Logistics Conference 2024, themed “Transformation for Breakthrough,” organized by Investment Newspaper under the patronage of the Ministry of Planning and Investment, will take place on October 31, 2024, at the JW Marriott Saigon Hotel (82 Hai Ba Trung Street, District 1, Ho Chi Minh City).

With the participation of over 300 domestic and international guests, the conference will analyze and discuss in depth the most pressing issues in the industry, such as new challenges and trends, modernization of logistics infrastructure, enhancing supply chain efficiency, promoting digital transformation, and developing new logistics business models.

Information about the Forum will be streamed live on the online platforms of Investment Newspaper and published in mass media. Conference information is regularly updated at: https://logsummit.vir.com.vn.

Source: https://baodautu.vn/batdongsan/bat-dong-san-logistics-manh-dat-mau-mo-cho-doanh-nghiep-lon-d227175.html