HCM City (VNS/VNA) - The development of e-commerce together with delaysto import and export activities due to disrupted logistics services has accelerateddemand for ready-built factories and warehouses during the COVID-19 outbreak inVietnam.

In contrast, the number of leasing inquiries for other industrial propertieshas fallen due to travel bans and social distancing.

“After the pandemic is contained, the average asking rent for warehouses willincrease by 4-11 percent y-o-y,” Pham Ngoc Thien Thanh, associate director atCBRE Research & Consulting, said at an online conference on ready-builtfactory development held in Ho Chi Minh City this week.

Over the last two years, Vietnam's ready-built factory and warehouse market hadgrown with strong supply and stable performance, according to CBRE Vietnam Ltd,Co.

“It is expected that by the end of 2020, the total supply of ready-builtfactory and warehouses in the North will reach 2 million sq.m, up 25.3 percenty-o-y. Ready-built factories in the South will reach 2.7 million sq.m, up 28.2 percenty-o-y,” Thanh said.

“Vietnam's ready-built factory and warehouse market is expected to continue togather momentum in the coming years. Demand for warehouses has been mainlydriven by e-commerce companies who are expanding their storage space anddistribution networks,” said Le Trong Hieu, director of CBRE Industrial LeasingServices. “In addition, more investors/developers are actively seeking sites todevelop logistics facilities.”

Niche industrial and logistic assets will also benefit in the long term, withgrowing consumption and distribution of groceries and fresh foods set toaccelerate occupier demand for temperature-controlled storage (cold or coolstorage warehouses), according to Hieu.

In the context of limited industrial land supply, high-rise warehouses had beenintroduced to create bigger storage space for the needs of e-commercecompanies.

The pandemic had added impetus on manufacturers and governments to plan toreduce supply chain dependency on China (and potentially any other singlemarket). This would form part of the overarching theme of a move away fromcentralised supply and towards greater diversification – a trend likely tobenefit Vietnam, according to CBRE Vietnam.

During this difficult period, developers of industrial parks and ready-builtfactories have offered support policies, including reductions of rents andinfrastructure maintenance fees (from 10 percent to 30 percent), restructuringpayment terms and exempting rent for new businesses setting up factories duringthe outbreak.

It is time for a critical makeover of Vietnam's industrial property market.Ready-built warehouses and factories are evolving quickly to take advantage ofthis golden opportunity. Robust demand for ready-built factories include newfactory set-ups and expansion. More recently, developers have been constructingready-built factories and warehouses to maximise the efficiency of land use andcater to the full spectrum of demand.

The modern generation of ready-built factories, so-called "Ready-builtfactory 4.0", integrated 4.0 technologies to bring more convenience tooccupiers in the process of leasing, manufacturing and operating, and wasemerging as a new trend, according to CBRE Vietnam. Ready-built factories 4.0apply virtual reality technology to bring factory spaces to clients at any timeand anywhere./.