Vietnam’s logistics industry is developing strongly thanks to the growth of the e-commerce industry, according to Savills Vietnam. This is one of the factors that make the demand for logistics real estate increase sharply, it said.
A survey by Savills Vietnam showed that Vietnam's logistics industry is enjoying significant growth due to the development of the national economy, and the manufacturing and e-commerce sectors. According to a report on the emerging market logistics index released earlier this year by Agility, a leading logistics and transportation service provider in 2022, Vietnam ranks 11th among the world’s top 50 emerging markets, only behind Indonesia, Malaysia and Thailand in the Association of Southeast Asia Nations.
Vietnam's transport and logistics market is estimated to grow at a compound annual growth rate (CAGR) of 7% in the 2021-2026 period. The Vietnamese government encourages enterprises manufacturing and attracts investment by establishing industrial and economic zones. Despite challenges from the COVID-19 pandemic, this industry still thrives thanks to opportunities brought about by domestic production and consumption, economic growth, free trade agreements (FTAs) and the e-commerce boom.
According to Matthew Powell, Director of Savills Hanoi, Vietnam is a destination for many businesses in the manufacturing and logistics sectors, especially before the development of the e-commerce industry. This is coupled with an increased demand for high quality industrial real estate.
Currently, many businesses find it difficult in the search for locations for their factories and warehouses. Industrial parks and warehouse logistics, especially around big cities like Hanoi, have high occupancy rates even up to nearly 100% in many places. The supply of industrial real estate is falling to keep up with the demand of enterprises.
This offers an opportunity for international real estate developers to invest in Vietnam, he said. Many investors are seizing the opportunity to launch products that are suitable for the market, therefore, the supply shortage will soon be resolved in the coming months, Powell said.
