HCM City (VNS/VNA) - Cold storage might soon become a rising starin the logistic sectors, property market researcher Jones Lang LaSalle (JLL)Vietnam has said.

It told a recent seminar to discuss trends in logistics that investors arealready partial to cold storage facilities after online grocery salesskyrocketed during the pandemic, requiring more refrigerated warehouses closeto buyers.

“There has been a spike in short-term logistics requirements directly linked tothe immediate impact of the pandemic, particularly in relation to thesignificant expansion of online grocery spending, and the need to supportcritical health services such as vaccines distribution.”

Since all leading vaccines require very low temperatures to remain effective,cold storage for the new COVID-19 vaccines might be the next big thing in thesupply chain and logistics industry.

Another trend seen in the market is automation.

Trang Bui, head of markets, JLL Vietnam, said: “The COVID-19 pandemic isaccelerating automation in the logistics sector and will become a major trendin the near future.

“Tenants are upgrading from outdated, often small and owner-occupiedfacilities, to newer facilities in premium locations. Simultaneously, theconsolidation of logistics operations into more modern facilities is improvingefficiency and reducing the overall logistics costs of tenants. Growth in otherindustries will also support three-party-logistics market expansion, includinggrowth in the food and beverage, healthcare and pharmaceuticals and office andtechnology equipment industries.”

Rapid urbanisation and the growing middle class are among the biggest driversof growth. Demographic forces drive demand for commercial real estate, and thisis a major factor that underpins demand in Vietnam, and the Asia Pacific ingeneral.

Around 35 per cent of Vietnam’s population currently lives in urban areas, upfrom 29 per cent just about a decade ago. As the market matures, the level oflogistics space required to serve the population is likely to rise, leading togreater requirements for logistics space.

E-commerce is likely to drive demand for logistics real estate. Typically,e-commerce firms use more logistics space than brick-and-mortar retailerslargely due to a more extensive product range, greater inventory levels, largeroutbound shipping space requirements, and increased reverse logistics.

In recent years the supply chain has become increasingly consumer-driven.Delivery speed has always been a major factor in the buying decision, withmajor online retailers offering same-day delivery options.

To keep ahead of the curve, retailers and logistics providers need to respondto changing customer needs.

In order to achieve growth goals, Vietnam's logistics industry will have toovercome the many challenges that remain. For Vietnam to enter the next phaseof the industrial/logistics cycle, become more competitive and move ahead ofregional peers, it is vitally important to continue investing ininfrastructure, both highways and utility networks, and renewable energy.

Also, Vietnam's cross-border trade process still needs significant improvementsin both processing time and costs.

According to the 2020 Vietnam Logistics Report by the Ministry of Industry andTrade, the global logistics sector has been seriously affected by the COVID-19pandemic. Although governments work to maintain the supply chain of goods andgive priority to the circulation of essential goods, due to disease controlmeasures like social distancing and work-from-home orders, there are times whenmost commercial markets are paralysed./.