### Stability in Warehouse Rents
Despite fluctuations in various sectors, warehouse rents in Vietnam’s Southern Key Economic Zone have shown remarkable stability. According to a recent report from Cushman & Wakefield, the average rent for warehouses has consistently remained at $4.5 per square meter per month, showcasing a steady demand that contrasts with the trends seen in other areas of the industrial market.
### Industrial Land Market Update
In the fourth quarter of 2024, the industrial land market in this economic zone saw no new supply, maintaining the existing total at 28,500 hectares. This figure reflects a quarter-on-quarter stability and a modest increase of 1.6% when compared to the same period last year. While the market exhibited stability, it highlighted an ongoing demand for industrial spaces.
### New Supply of Ready-Built Factories and Warehouses
Notably, the supply of ready-built factories and warehouses received a boost with six new projects coming online. This development increased the total supply of ready-built factories to approximately 6,424,000 square meters and warehouses to around 6,300,700 square meters. This increase indicates that while the land supply remains static, the provision of ready-built facilities is adapting to meet market needs.
### Rising Costs for Industrial Land and Factories
The report highlights a rising trend in rents for industrial land, which increased by 4.6% year-on-year, reaching $176 per square meter for the lease term. Similarly, the rent for ready-built factories experienced a 2.3% increase, now averaging $4.8 per square meter per month. This upward trend in land and factory rents reflects a growing interest in industrial investments, despite the overall stability in warehouse rents.
### Demand Dynamics in Q4 2024
Demand for industrial land and ready-built factories is continuing to flourish. In Q4 2024, there were 64 hectares of industrial land transactions, indicating a drop of 40.5% quarter-on-quarter and 23.5% year-on-year. Notably, Long An and Ba Ria – Vung Tau played significant roles in this landscape, contributing approximately 48% and 35% to the overall absorption of industrial land.
### Net Absorption Trends for Factories
The total net absorption of ready-built factories this quarter was recorded at over 226,000 square meters, marking a decline of 7.9% from the previous quarter. However, when compared to last year, this figure is nearly three times greater. Binh Duong led the way in absorption, accounting for a remarkable 76% of the total, with Dong Nai following with 15%. This illustrates the significant role Binh Duong plays in the industrial landscape of the Southern Key Economic Zone.
### Warehouse Demand and Net Absorption Statistics
The demand for ready-built warehouses also continues to show resilience. The total net absorption reached nearly 45,400 square meters in Q4 2024, a decrease of 7.8% from the previous quarter but nearly triple that of the same period last year. Dong Nai led the way in warehouse absorption, representing 57% of the total, while Ba Ria – Vung Tau captured 22%. Binh Duong and Dong Nai each contributed around 10-11% to the overall demand.
### Investment Policies and Future Developments
Exciting developments are on the horizon, as the government approved investment policies for over 1,000 hectares of industrial land in the southern region. This includes plans for the expansion of notable industrial parks like My Xuan B1 – Conac in Ba Ria – Vung Tau and phase 1 of Bau Can – Tan Hiep in Dong Nai. These initiatives reflect a proactive approach to enhance industrial growth in the region.
### Infrastructure Projects to Boost Industrial Parks
The industrial parks in the southern region are poised for significant benefits from new infrastructure projects such as Long Thanh Airport, the Bien Hoa – Vung Tau Expressway, and the ongoing developments of Ho Chi Minh City Ring Road 3. These enhancements, scheduled for completion by 2026, are expected to further stimulate both demand and prices for industrial land, fostering a burgeoning industrial environment.