Specifically, industrial land prices in tier 1 markets in the North increased slightly by 1.2% compared to the previous quarter and by 7.8% year-on-year, reaching an average of $133 USD/m2/remaining term. In the South, industrial land prices in tier 1 markets remained stable at $189 USD/m2/remaining term, stable compared to the previous quarter and up by 2.4% year-on-year.

Despite no new projects launched in the quarter, existing industrial parks in tier 1 markets in the North continued to attract new tenants, with the occupancy rate increasing by 1.3 percentage points to 83%. Nearly 110 hectares were absorbed in the quarter, with notable transactions such as the 10-hectare Victory Giant Technology factory in Bac Ninh, the 21-hectare Deli factory, and the 20-hectare BoViet factory in Hai Duong.

However, in the Southern market, due to relatively limited industrial land supply, the occupancy rate remained stable at 92%, with only over 20 hectares absorbed. Domestic and foreign manufacturers tended to expand into tier 2 markets such as Ba Ria - Vung Tau and Tay Ninh, where industrial land supply is relatively abundant and rental prices are more competitive than tier 1 markets.

With ready-built warehouse markets, numerous large-scale projects continued to be introduced in the Northern region in the first quarter, particularly in Bac Ninh. New supply continued to come onto the market, with the average occupancy rate in tier 1 markets in the North reaching 70% for ready-built warehouses, down by 6 percentage points from the previous quarter, and 87% for ready-built factories, unchanged from the previous quarter.

The average rental price for ready-built warehouses in tier 1 markets remained stable at $4.7 and $4.9 USD/m2/month. Rental prices maintained stability over the year, while factory rental prices increased by 3.9% annually while maintaining a high occupancy rate.

In terms of demand, positive market developments came from some high-tech manufacturers such as semiconductor and engine technology manufacturers expanding in Vietnam through leasing manufacturing warehouses, such as VDL and Tecnotion (Netherlands).

After a period of strong growth, the Southern warehouse market saw no new supply in the first quarter, with new projects still under construction and completion. However, the lack of new supply had a positive impact on the operations of existing ready-built warehouses, with the occupancy rate increasing by 2 percentage points from the previous quarter, reaching 57% for warehouses and 87% for factories.

In terms of average rental prices, the average rental price for ready-built warehouses in the Southern market remained stable compared to the previous quarter at $4.6 and $4.9 USD/m2/month, with a growth rate of 2.2% compared to the same period last year for warehouses and 3.9% for factories.

Similar to the Northern market, demand for ready-built warehouses in the South comes from high-tech manufacturers, renewable energy, and the expansion of e-commerce companies like JiaWei (Taiwan) and Shopee (Singapore).

Over the next three years, industrial land rental prices are expected to increase by 3 - 9% annually in the North, while rental prices for ready-built warehouses and factories are forecasted to increase slightly by 1 - 4% annually.

With Vietnam upgrading its diplomatic relations with major economies in recent years, the overall economy, manufacturing industry, and industrial real estate market are expected to benefit and continue to develop.

Brought to you by MrBeliever.com