The Northern industrial real estate market continues its upward trend as demand and absorption remain positive. The average rental price in Q2024/137 reached USD 2/m2,2/remaining term, up 4,6% QoQ and XNUMX% YoY. Due to stable demand and better occupancy rates, the increase in rental prices for ready-built factories is also more pronounced than that of ready-built warehouses.
CBRE's industrial real estate market focus for the third quarter of 2024 shows that in the first 9 months of 2024, the industrial real estate market continued to record positive developments.
Citing data from the General Statistics Office, CBRE said that in the first 9 months, the added value of the entire industrial sector increased by 8,34%, of which the processing and manufacturing industry was the growth driver with a growth rate of 9,76%. The recovery of industrial production contributed to the impressive GDP growth results in the third quarter of 2024 as well as the first 9 months of this year.
Analyzing the developments of industrial real estate segments and industrial land rental prices in tier 1 markets in the North, Ms. Nguyen Hoai An - Director of CBRE Vietnam Branch in Hanoi said that the market continues to increase when demand and absorption levels are maintained positively.
The average rental price at the time of Q2024/137 is 2 USD/m2,2/remaining term, up 4,6% quarter-on-quarter and XNUMX% year-on-year.
The absorbed area in the first 9 months of 2024 will reach about 330 hectares, helping the average occupancy rate in key northern provinces reach 80% in the third quarter of 2024, an increase of 3 percentage points over the same period last year.
Industrial parks in the Northern region attract many manufacturers from different industries, typically including transactions such as Foxconn's electronics factory (14ha) in Bac Ninh, Johnson Group's sports equipment factory in Bac Ninh (20ha).
New supply at a more moderate level has helped the market perform positively, especially in the ready-built factory segment. By the end of Q2024/1, the occupancy rate of ready-built factories in tier 91 cities and provinces reached 9%, up 2 percentage points over the same period. Meanwhile, the demand for stockpiling goods for the year-end holidays has helped improve the absorption rate of ready-built warehouses, doubling compared to the previous quarter, reaching 67.000 m2. The occupancy rate by the end of Q2024/80 reached 4%, up XNUMX percentage points over the same period.
Ready-built factories have higher price growth rate than warehouses
In the next three years, industrial land rental prices are expected to increase by 3-4% per year in the North. Meanwhile, rental prices of ready-built warehouses/factories are forecast to increase slightly by 8-1% per year, with the ready-built factory segment experiencing a higher price increase rate in the next three years.
Positive demand from the electronics, semiconductor, automobile and spare parts industries will be an important driving force for the development of industrial real estate in the North.
Analyzing new trends in the market, Ms. Nguyen Hoai An said that recently, CBRE has observed that many high-rise warehouse projects have begun to be implemented and planned in the Northern region, in locations conveniently connected to Hanoi and with high industrial land rental prices - a trend that has appeared in the Southern market for a few years.
Ms. Nguyen Hoai An said that this is a solution to help investors optimize land use coefficient, increase supply in areas conveniently connected to Hanoi and help the market have more diverse products./.
Source: Vietnam Financial Times
