TRENDS AND DEMAND OF WAREHOUSE SPACE
Due to the rising demand of warehouse space, DB Schenker, a global leader in supply chain management and logistics solutions announced to provide a new service. This new service screens almost 9 million square meters of storage space daily. It identifies and assesses available idle space in their almost 800 logistic warehouses in more than 60 countries. This is just one of many events of logistics industry recently, showing the demand of warehouse and storage space globally.
Areas that are typically used for dedicated customers are being transformed into temporary storage areas for companies that urgently need additional capacity for e-commerce booms, lead by Amazon or Alibaba. With Covid-19, industries such as food and healthcare are experiencing out of the ordinary demand rates, thus affecting their production levels and storage abilities. Although this service was reactive to Covid-19, the ability and use of storage scanners will continue in the future, as the need for warehouses increase, especially logistics warehouse.
Areas that are typically used for dedicated customers are being transformed into temporary storage areas for companies that urgently need additional capacity for e-commerce booms, lead by Amazon or Alibaba. With Covid-19, industries such as food and healthcare are experiencing out of the ordinary demand rates, thus affecting their production levels and storage abilities. Although this service was reactive to Covid-19, the ability and use of storage scanners will continue in the future, as the need for warehouses increase, especially logistics warehouse.
DEMAND OF WAREHOUSE FOR RENT VIETNAM
In the case that demand of warehousing service seems higher and higher, many companies are developing warehouse construction for rising demand. Driving demand of warehouse construction is from enterprises who have to store material, finished products, machinery of investment projects and also from e-commerce market.
In Vietnam, with the fast pace of foreign investment flow coming, warehouse and logistics infrastructure have been developed in many industrial parks to seize chances from supply chain movement.
A Senior Director of JLL Vietnam said the change in consumer behavior has increased both short-term and long-term demand for industrial real estate, allowing companies to orders faster by placing headquarters closer to the customer. The exponential growth of e-commerce has fueled demand for industrial real estate over the past 10 years, and the spike during the pandemic further clarifies the potential and flexibility of e-commerce industry. The sudden increase in orders forced e-commerce companies to keep more of their stock in locations near to customers, and the demand for warehousing was thus boosted.
In Vietnam, with the fast pace of foreign investment flow coming, warehouse and logistics infrastructure have been developed in many industrial parks to seize chances from supply chain movement.
A Senior Director of JLL Vietnam said the change in consumer behavior has increased both short-term and long-term demand for industrial real estate, allowing companies to orders faster by placing headquarters closer to the customer. The exponential growth of e-commerce has fueled demand for industrial real estate over the past 10 years, and the spike during the pandemic further clarifies the potential and flexibility of e-commerce industry. The sudden increase in orders forced e-commerce companies to keep more of their stock in locations near to customers, and the demand for warehousing was thus boosted.
Another expert in industrial real estate market said that the advantage when choosing to rent a ready-built factory is flexible rental area (minimum of 500 m2), flexible payment terms, easy to manage cash flow, peace of mind about building certificates and applications. streamlining licensing process, professional facility management team. Currently in the North of Vietnam, the supply of ready-built factories and warehouses in industrial zones has reached more than 3 million SQM.
In particular, the factory space supply is still located at a higher level because Vietnam has been focusing more on manufacturing sectors, especially the needs of suppliers of large corporations who have entered into Vietnam. Meanwhile, in the South of Vietnam, the total stock has reached more than 5 million SQM, including warehouses and workshop space for rent. In terms of rent, ready-built factories for rent have been set at a new price.
The price quoted in 2-3 years ago at 3.5 USD/m2/month (not including VAT and utilities), the current average price is more than 4 USD/m2/month. Meanwhile, the rental price of the warehouse space for rent has increased by 5-10% for new projects over the same period.
In particular, the factory space supply is still located at a higher level because Vietnam has been focusing more on manufacturing sectors, especially the needs of suppliers of large corporations who have entered into Vietnam. Meanwhile, in the South of Vietnam, the total stock has reached more than 5 million SQM, including warehouses and workshop space for rent. In terms of rent, ready-built factories for rent have been set at a new price.
The price quoted in 2-3 years ago at 3.5 USD/m2/month (not including VAT and utilities), the current average price is more than 4 USD/m2/month. Meanwhile, the rental price of the warehouse space for rent has increased by 5-10% for new projects over the same period.
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