According to a CBRE report, the industrial land market showed positive occupancy rates. The northern region recorded an average occupancy rate of 81%, while the southern region reached 92%. Absorption in the northern market reached its highest level in five years, exceeding 800 hectares, a 37% increase compared to the same period last year. The southern market, due to relatively limited industrial land, saw a 32% lower absorption rate compared to the same period last year, reaching approximately 500 hectares.
The ready-built warehouse and factory market also recorded positive growth, with the highest ever supply of new warehouses/factory space coming online in the North, totaling 770,000 m2. In the South, the amount of new supply reached a similar level to the North, although it was lower than three years prior.
In the North, rental prices for ready-built warehouses remained stable at $4.6 USD/m2/month. For factory space, the average price reached $4.8 USD/m2/month, a 3.9% increase year-on-year.
Pre-built warehouses and factories have maintained high absorption rates recently.
Similarly, in the Southern market, the rental price for ready-built warehouses is currently at US$4.6/m2/month, up 4.7% year-on-year. The rental price for ready-built factory spaces in this area is US$4.9/m2/month, up 2.3% year-on-year. The average rental price increase is due to the completion and operation of new high-standard projects in Ho Chi Minh City and Long An this year.
Despite a continuous increase in supply over the past period, occupancy rates in both regions have remained stable. With demand still high, industrial land lease prices are expected to increase by 5-9% per year in the North and 3-7% per year in the South over the next three years.
Positive demand from various industrial sectors has helped drive rental price growth in many localities. Meanwhile, rental prices for ready-built warehouses/factories are projected to increase slightly by 1% - 4% per year over the next three years. Particularly in the past year, many new investment sectors have emerged in Vietnam, such as the semiconductor and electric vehicle industries. This marks the beginning of many other sectors investing in Vietnam in the future, leading to strong development of industrial real estate.
This growth in industrial real estate is also influenced by the continuous inflow of FDI 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 US$36.61 billion, an increase of 32.1% compared to the same period. The disbursed capital of foreign investment projects is estimated at approximately US$23.18 billion, an increase of 3.5% compared to 2022. This is a record level of disbursement to date.
Industrial real estate prices are expected to rise slightly due to increased demand.
In terms of total registered capital, newly registered capital reached nearly US$20.19 billion, an increase of 62.2% compared to the same period last year; the number of newly registered projects also reached 3,188 projects, an increase of 56.6%. Thus, both new projects and newly registered capital increased sharply. This is a very noteworthy point.
With the large amount of FDI flowing into Vietnam continuing to increase, foreign businesses will have a high demand for production space and warehouses to support their production and business operations. This is a source of demand that has only increased, not decreased, throughout the past period.
Regarding the industrial real estate market, many believe that this type of property will develop further in 2024. At the same time, industrial real estate will continue to lead the overall real estate market, driving its recovery in the coming period.
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