Vietnam: The Rising Star in Global Logistics Amidst a Cooling Market
As global logistics hubs like London, Sydney, and Dubai navigate the challenges of soaring operating costs and stagnating rental growth, the Asia-Pacific region—especially Vietnam—shines as a beacon of stability and optimism. The first half of 2025 witnessed a global reality check, but Vietnam’s logistics market has defied general trends, setting itself apart in the competitive landscape.
Global Rental Trends: A Slowdown
Recent analyses highlight a significant cooling in the logistics sector worldwide. According to a report from Savills, prime warehouse rental prices saw a modest increase of just 1.1% in the first half of 2025, marking the slowest growth rate in three years. This trend raises red flags for prominent global hubs where businesses are grappling with escalating costs and diminishing returns. In stark contrast, the Vietnam logistics market has managed to maintain a more balanced approach to supply and demand.
Stability Amid Fluctuation
What distinguishes Vietnam from other logistics markets is its resilience. Unlike several regions that experienced dramatic post-COVID rental spikes, the country has enjoyed steady prime warehouse rents. In Ho Chi Minh City, these rents hover around $5.3 per square meter per month, while slightly higher rates of $5.5 are observed in Hanoi. This pricing stability can largely be attributed to a robust influx of new warehouse supply and a tenant base that remains acutely cost-conscious—qualities that help insulate the market from the volatility experienced elsewhere.
Strong Supply-Demand Dynamics
Mr. John Campbell, Head of Industrial Services at Savills Vietnam, emphasizes that Vietnam’s logistics performance reflects the broader stability characteristic of the Asia-Pacific region. The consistent supply pipeline and tenants’ well-defined cost-control strategies enable the market to sustain reasonable pricing structures devoid of the erratic rental surges that are common in other global hotspots.
Competitive Advantage: Lower Costs
One of the driving forces behind Vietnam’s logistics prowess is its significantly lower land and construction costs when compared to other established logistics markets like Japan, South Korea, and Singapore. These economic advantages not only make operating in Vietnam more appealing but also create a conducive environment for businesses looking for cost-effective logistics solutions.
Government Policies: A Supportive Ecosystem
Beyond natural advantages, proactive government policies aimed at boosting infrastructure and logistics development play a crucial role in Vietnam’s growth. These initiatives have led to reduced operating costs while simultaneously creating a favorable ecosystem for manufacturing and distribution. With the government’s commitment to enhancing logistics infrastructure, Vietnam is becoming increasingly attractive not only to local businesses but also to international corporations seeking long-term stability.
Strategic Location and Political Stability
Vietnam’s geographical positioning in Southeast Asia grants it easy access to vast markets, making it an ideal nexus for supply chain and logistics operations. Coupled with political stability, the region is gaining traction among global companies looking to restructure their supply chains in response to changing market dynamics. The country’s ability to adapt and provide competitive logistics options gives it a significant edge in the emerging market landscape.
In conclusion, Vietnam exemplifies a unique blend of stability, lower operational costs, and strategic advantages, setting it apart from its global counterparts in the logistics sector. As the market continues to evolve, its capacity to attract foreign investment and support manufacturing and distribution endeavors is expected to strengthen further.