Ready-built factory and warehouse Continue to Attract FDI

Foreign industrial park developers are increasing investment in ready-built factory and warehouse due to high demand and competitive rental prices.

Market Pricing and High Occupancy Rates

Market research shows that in 2024, the ready-built factory and warehouse market in both regions will experience high absorption rates.

CBRE Vietnam reports both regions saw the highest absorption levels in the past 3 years for ready-built factories. In the North, factory occupancy reached 88%, up nearly 2%, while in the South, it reached 89%, up nearly 8%.

This result is due to abundant new supply, increasing by 500,000 m² in the past 3 years. Factory rental prices rose by 2%, reaching $4.9/m² in the North and $5/m² in the South.

In the South, net absorption of ready-built warehouses doubled to 400,000 m². Positive results led to a 5.3% price increase. By the end of 2024, warehouse rental prices are expected to average $4.7/m²/month.

Northern and Southern Market Trends

New supply in the Northern logistics market has been welcomed, with projects mainly concentrated in Bac Ninh. This trend is expected to continue in 2025, with several prominent projects currently under construction.

The Southern market saw positive net absorption rates, reaching nearly 19,600 m², driven by increased leasing activity. Leasing improved due to demand from tenants serving the domestic consumer market, especially active toward the end of the year.

By the end of 2024, Southern logistics supply will reach 2 million m². Binh Duong leads with over 661,500 m². Dong Nai and Long An follow, each accounting for roughly 26% and 25% of total supply, respectively. Ho Chi Minh City ranks fourth, while Ba Ria – Vung Tau has not focused on development despite existing logistics facilities.

Ready-built factory and warehouse in Long An attract Japanese customers

Foreign Investors Race to Invest

In January 2025, Hulic Group (Japan) and Indochina Kajima formed a joint venture to invest in two projects.

The Core5 Hung Yen project, located in Minh Duc Industrial Park, provides over 63,000 m² of LEED-certified ready-built factories. After 9 months, the occupancy rate for Core5 Hung Yen reached nearly 77%. The Core5 Quang Ninh project reached full occupancy. Located in Bac Tien Phong Industrial Park, the Core5 Quang Ninh project provides 69,000 m² of floor space with full occupancy.

Indochina Kajima, a joint venture with Kajima Corporation (Japan), has operated Core5 Vietnam projects in many strategic locations since 2022. The focus is on ready-built factories and warehouses for rent. The Hulic joint venture will expand projects to tap global supply chain opportunities.

Market Outlook and Challenges

Ms. Trang Le from JLL Vietnam mentioned that the Southern market is preparing for expansion, with 684,000 m² under construction.

However, increased supply without a significant demand rise may lead to heightened competition and challenges in leasing and price growth.

Investors are implementing flexible leasing options for ready-built warehouses and factories and supporting customers with procedures and licenses.

If you are looking for a quality, affordable warehouse solution in the Southern region, please contact OSSIF.

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