The industrial real estate market is progressing positively

In the third quarter of 2023, in the Northern region, the average occupancy rate of industrial parks in the tier 1 market reached 80.2%, an increase of 0.4 percentage points year-on-year. The market continues to record large transactions from tenants in the plastic, textile, and contact lens manufacturing industries in many provinces and cities.

The absorption rate of industrial land in tier 1 markets reached 251 hectares in the quarter. In total for the first 9 months of the year, the absorption rate reached more than 700 hectares, 18% higher than the absorption rate of the whole year 2022. Industrial land rental prices continue to increase due to positive demand. In the third quarter, the average rental price for the primary market in the North reached 131 USD/m2/remaining term, an increase of 2% quarter-on-quarter and 12% year-on-year.

In the Southern industrial market, the average occupancy rate in industrial parks reached 81.9%. The land absorption rate reached more than 190 hectares, an increase of 5.9% compared to the previous quarter, for the first 9 months of 2023, it reached more than 770 hectares, nearly equal to the absorption rate of the whole year 2022. Regarding rental prices, industrial land rental prices The average in level 1 markets reached 189 USD/m2/remaining term, continuing to increase slightly by 1% compared to the previous quarter and 13% higher than the same period last year. The market recorded large transactions from Chinese and Japanese enterprises in a variety of industries such as mechanical engineering, chemicals, plastics, rubber, and electronics.

In the next two years, industrial land rental prices are expected to increase by 6-10%/year in the Northern region and 4-8%/year in the Southern region. Positive demand from many industry groups and tenant nationalities helps boost rental prices in many localities. Meanwhile, ready-built warehouse rental prices are forecast to increase slightly by 2-4%/year in the next two years. In the first 9 months of 2023, tenants from China, Vietnam, Japan, the US and the European Union are investors actively looking for industrial land and warehouses in the Vietnamese market; accounting for about 70–80% of rental inquiries to CBRE in both the Southern and Northern regions. With Vietnam recently upgrading its cooperative relations to a comprehensive strategic level with major partners such as the US, Korea, and China, investment capital flows from these countries are expected to continue. leading the demand for Vietnam's industrial real estate market in the coming time.

Vietnam's industrial real estate market will continue to have many changes in the coming time. More and more businesses and tenants are putting sustainable development goals into the criteria for choosing factory development locations and renting warehouses - this will be a factor promoting the development of new supply of industrial technologies. green program in the future”.