The total warehouse supply in 4 southern provinces soared to over 3 million m2, the North also grew with more than 880,000 m2 of logistics.
The latest JLL report on logistics real estate shows that Vietnam's logistics (real estate) market has boomed strongly in the past 12 months. Developments show that investors are still interested in the warehouse market share and continuously boosting supply to record highs, despite the impact of Covid-19.
As of December 2020, the total supply of warehouses in Long An, Ho Chi Minh City, Dong Nai and Binh Duong has exceeded the threshold of over 3 million square meters of floor space, of which Binh Duong leads with nearly 1.4 million square meters of logistics supply. to the logistics real estate market. Ho Chi Minh City and Dong Nai respectively bring to the market 600-800 thousand m2 of warehouse. Long An has the least logistics supply in the top 4 southern provinces but soon appeared hundreds of thousands of square meters of warehouses serving the gathering and transshipment market of goods from the western provinces.
Meanwhile, the Northern provinces grew more modestly than the industrial capital of the South with a total supply of 880,000 m2 of logistics appeared in Hai Duong, Hung Yen, Hanoi, Bac Ninh and Hai Phong.
The cause of the booming wave of logistics real estate according to JLL is that Vietnam's demographics are characterized by a young population, high urbanization, and especially the breakthrough of e-commerce. Great motivation for logistics real estate demand.
Typically, e-commerce companies use more logistic space than traditional retailers. This is largely due to a richer product range, greater inventory levels, greater overseas shipping space requirements, and two-way logistics (return process).
Model of cold warehouse. Photo: ABA.com.vn
E-commerce currently accounts for about 20% of total retail sales in Asia Pacific compared with 14% globally. Vietnam is currently one of the fastest growing e-commerce markets in Southeast Asia. Revenue from e-commerce is estimated to reach 4.07 billion USD in 2015, increasing to 6.2 billion USD in 2017. By 2020, the market is expected to reach about 13 billion USD, double the level in 2017.
With requests to improve and shorten delivery speeds to serve consumers the fastest, major online retailers aim to offer same-day delivery options. Since then, there is a wave of expanding the supply chain network. To stay ahead of the trend, retailers and logistics providers need to be responsive to changing customer needs. Successful last mile delivery strategies will need the latest innovative solutions, processes, digital transformation and technology.
Ms. Trang Bui, JLL Vietnam Market Senior Director, said that Covid-19 is speeding up the automation process in the logistics sector and will become the main trend in the coming time, which is a great driver for the market logistics exploded. Warehouse tenants are tending to upgrade from outdated, small and medium-sized facilities managed by private owners, to move into modern, better-located warehouses.
In addition, the integration of logistics operations into supply chain modernization is improving operational efficiency and reducing overall logistics costs for tenants. Growth in other industries will also support the expansion of the trilateral logistics market, including growth in the food and beverage, healthcare and pharmaceutical industries, as well as the office equipment and technology industries. . '
This expert predicts cold storage will become a star in the logistics future. Investors have long been interested in the cold storage industry, as more and more consumers ordered goods online during a pandemic, requiring more cold storage near customers. There has been a spike in short-term logistics requirements directly related to the immediate impact of the pandemic, especially for the need to purchase online and support critical medical services.
An example of a health service is the transport and storage of the new Covid-19 vaccine, which, if introduced into a broad vaccination program, will become an urgent need for every country. Since this particular commodity requires very low temperatures to remain effective, the problem of cold storage and circulation for vaccines could be the next important growth driver for the logistics and supply chain. .
However, Ms. Trang said, in order to achieve its future growth goals, Vietnam's logistics industry still has to overcome many challenges. First of all, for Vietnam to move to the next stage in logistics / industrial development, it is necessary to continue to maintain a reasonable level of investment in infrastructure investment. In addition, emphasis should be placed on the development of both highways and utility networks, including renewable energy.
Besides, Vietnam's cross-border trade process, which includes both time and costs, still needs significant improvements. Currently, cross-border transaction costs, including costs of document compliance and import-export costs, are less competitive in Vietnam than in other regional countries.
Trung Tín - VNEXPRESS
