Knight Frank Vietnam, part of Knight Frank LLP - the world's leading independent real estate consultancy group, has just announced the industrial real estate situation in the North and South in the third quarter of 2024 with many notable information.
North: BÂc Ninh dẫNDầu increaseUOng publicisp
Knight Frank Vietnam's new research on the ready-built factory, ready-built warehouse and industrial park segment in the Northern region also shows that Bac Ninh province is becoming a driving force for the region's industrial growth.
In the factory segment, the average asking rent for ready-built factories across the Northern market reached USD 5/m²/month in Q2024 0,6, up 3,4% QoQ and XNUMX% YoY. This reflects strong demand for modern and high-standard factory space in the region.
Bac Ninh Province, located in the vicinity of Hanoi, is driving the region’s industrial growth. Its strategic location and well-developed industrial infrastructure have made Bac Ninh a hotspot for leasing transactions, with projects from international developers such as Frasers Yen Phong Phase 1 and KTG Yen Phong attracting tenants from a wide range of industries.
Meanwhile, the launch of the BWID ESR Nam Dinh Vu project in Hai Phong added more than 70.000 square meters of new factory space. Despite the significant increase in supply, the overall market occupancy rate in the North remained high at around 2%, underscoring the strong demand for factory space across the region.
Knight Frank’s research also shows similar prospects for the ready-built warehouse segment. Bac Ninh province is emerging as a priority destination in this segment, thanks to its convenient location near major traffic routes and strong investment waves, increasingly asserting its leading position in the market, with about 44% of the total market supply as of QXNUMX.
Thanks to the emergence of new warehouse projects, the asking rent for modern ready-built warehouses in the North reached 4,6 USD/m2/month, up 3,2% year-on-year. During the quarter, the occupancy rate of the Northern market remained stable at 85%, up 4,6% year-on-year, with the majority of transactions coming from recently launched projects in Hai Phong and Bac Ninh. This reflects stable demand for high-quality ready-built warehouses in prime locations in the North.
Knight Frank experts commented that in the context of the industrial park segment growing more slowly due to complicated licensing procedures and project completion, Bac Ninh province still proves its strength. The average industrial land rental price is 130 USD/m2/rental cycle in Q3,1, corresponding to XNUMX% year-on-year growth, reflecting sustainable demand in the region.
Land leasing activity remained strong, with approximately 60 hectares of net absorption recorded in the quarter, up 33% quarter-on-quarter but down 48% year-on-year. Leading the way were Bac Ninh and Hung Yen provinces, with record numbers of new leasing investment projects.
South: Recovery and growth in 2025
Despite a challenging 2024 with global economic uncertainties and policy changes, the southern industrial real estate market is poised to recover and grow in 2025, according to Knight Frank research. Investors are increasingly optimistic about the southern industrial growth prospects, thanks to a combination of strategic location, infrastructure development, and growing demand for industrial space.
This year, due to external factors, investors have approached the market cautiously, but there are still some signs of recovery. Factory and warehouse supply continues to increase, with ready-built factory space increasing by 2% (about 92.000 m2) and ready-built warehouse space increasing by 3% (about 174.400 m2) compared to the previous quarter. The improvement in supply, together with a slight increase in asking rents, shows businesses' growing confidence in the long-term prospects of the market.
The industrial real estate segment also showed signs of growth, reaching a net absorption rate of 83 hectares in the third quarter, up 14,7% compared to the second quarter, but down 36,6% compared to the same period last year. Long An, Ba Ria-Vung Tau and Binh Duong provinces are emerging as bright spots for investment, attracting many businesses and diverse industries. The development of new industrial parks, such as Nam Tan Tap Industrial Park in Long An province, is expected to contribute to increasing the attractiveness of the southern region to investors.
Mr. Alex Crane, Managing Director of Knight Frank Vietnam, commented: “The continued development and exploitation of ready-built factories is a positive signal, providing tenants with more options when considering Vietnam as a suitable destination for investment or business expansion. Competition among factory landlords will create a favorable environment for tenants as well as stimulate growth. There are currently many options for leasing industrial space, including projects with environmental protection certification. This will help Vietnam integrate better into the global supply chain.”
According to Mr. Alex Crane, the warehouse market is also facing some difficulties due to increased supply and reduced absorption, however, this expert believes that the medium to long-term prospects of industrial real estate in the South are still very positive, with many high-quality projects with affordable rental prices: “Most of the Southern warehouse market depends on export demand and domestic consumption growth. In our opinion, when 2024 passes and elections around the world close, especially the US Presidential election, we will have a clearer direction for export demand in 2025, and consequently the demand for warehouse space in the South will increase”.
Knight Frank forecasts that the industrial real estate market will recover significantly by 2025. The completion of several long-delayed projects, along with increasing investor confidence, is expected to boost demand for industrial land. The region’s strategic location, improved infrastructure, and preferential policies will continue to play a key role in attracting foreign direct investment and promoting economic growth.
Source: Tra My – Urban People