Southern industrial real estate occupancy down in Q1

Specifically, the occupancy rates of land the key southern economic region’s industrial parks, ready-built factories and ready-built warehouses dropped by 8, 11 and 9 percentage points, respectively, over the same period last year.

However, rent for warehouses and industrial land in the region still increased by 8.1% and 13% respectively. Only the rent of ready-built factories declined by 3.3%.

According to real estate consultancy JLL, the ready-built warehouse market in the South was driven mainly by rental demand from domestic firms in the first three months of the year, while export activities were still sluggish.

At the same time, some new ready-built warehouse projects had low occupancy rates.

According to CEO of Cushman & Wakefield Vietnam Trang Bui, global economic instability, weakening consumption, and decreasing export orders are gradually affecting demand for industrial real estate, causing the sector to slow down after an extended period of rapid growth.

She said the industrial real estate market in the remaining months of 2023 may continue to experience decreases in demand, occupancy and rent.

In the coming time, rents for industrial land will remain high, but those of ready-built warehouses may go flat or even decline due to the recent explosion in supply coupled with falling demand amid economic difficulties, she predicted.