Year-end shopping season pumps up storage demand

By Dat Nguyen   October 31, 2020 | 10:15 pm PT
Year-end shopping season pumps up storage demand
An aerial view of Tan Tao Industrial Park in Binh Tan District, Ho Chi Minh City in July 2020. Photo by VnExpress/Quynh Tran.
Online sales discounts during the year-end season is pushing up demand for storage in Vietnam with major e-commerce players racing to make deliveries.

Trang Bui, senior director of office, retail, industrial and logistics services at real estate consultancy Jones Lang LaSalle (JLL) Vietnam, said in a recent report that the company is recording a surge in demand from e-commerce firms looking for 10-15 hectare storage centers.

The surge is happening despite the Covid-19 pandemic and the approaching year-end shopping season, she said.

The report noted that major sales days of the season, Single’s Day on November 11, Black Friday on November 27, Christmas Eve and New Year’s Eve, have increased demand for more storage space as e-commerce players race to deliver their products within 24 hours.

Data from another real estate consultancy CBRE Vietnam shows that in the third quarter this year, the supply of storage space and ready-built factories in northern Vietnam rose 25.3 percent year-on-year to 2.1 million square meters.

The growth rate is 28.2 percent to 2.7 million square meters in the southern region.

Prices of storage space have increased by 5-10 percent in the period as e-commerce booms, CBRE said.

Other industry insiders say that another reason for increasing storage demand are travel restrictions imposed because of the Covid-19 pandemic in the second quarter this year, which resulted in more customers for e-commerce companies.

The JLL report said that development of the e-commerce sector will boost logistics related real estate in the near future.

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