Ready-built warehouses struggle to find tenants

By Vu Le   July 14, 2023 | 03:37 pm PT
Ready-built warehouses struggle to find tenants
Song Than Industrial Park in the southern province of Binh Duong. Photo by VnExpress/Quynh Tran
Demand for ready-built warehouses has slowed down as prospective tenants delay decision-making amid slowing business and economic difficulties.

A report by real estate consultancy Jones Lang LaSalle (JLL) Vietnam said that after years of strong growth the ready-built warehouse market in the south has entered a quiet period, with high vacancy rates especially in the provinces of Binh Duong and Dong Nai.

According to JLL Vietnam, in the context of prolonged quiet cross-border trade activities (tale of kieu?) With trade slumping, manufacturing enterprises have been forced to scale back, severely affecting the segment, it said.

Ready-built warehouses in northern Binh Duong and southern Dong Nai, home to many factories, have cut rents due to the low demand.

JLL expected businesses to become more cautious in expanding and implementing new projects, and adopt a wait-and-see attitude in the second half of this year.

Another real estate consultancy, Cushman & Wakefield Vietnam, said the ready-built warehouse market was sustained mainly by domestic demand in the second quarter as demand from exporters dropped significantly.

The net absorption was 6,400 sq.m, equivalent to an occupancy rate of 73%, 4 percentage points down from a year earlier.

Meanwhile, supply continued to increase.

In the second quarter nearly 46,000 sq.m of new supply came into the market from the Emergent Le Minh Xuan 3 project, increasing supply by 11.4% to 5.13 million square meters.

It is expected that by 2026 the market will add another 1.3 million square meters.

The CEO of Cushman & Wakefield Vietnam, Trang Bui, said there would now be price competition, and developers would have to have more attractive rental policies and incentives to attract tenants.

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