Positive net absorption, bolstered by manufacturer demand

• The Modern RBW market remained generally stable in H1 2024. The manufacturing group’s desire to lease warehouses is particularly strong as a result of increased investment in the manufacturing sector following the China Plus One strategy.
• Net absorption reached 80,000 sqm in H1 2024, from the Bac Ninh, Hung Yen and Hai Phong provinces.

The market welcomes new supply from three projects in the Hung Yen and Bac Ninh provinces

• With the addition of 73,000 sqm of new space in Hung Yen and Bac Ninh, the Northern supply totalled around 1.2 million sqm by end-H1 2024. The completion of the Horizon Park project in Bac Ninh marked the market entry of new player, IDEC Group.
• The Northern market is growing and diversifying, as seen by the increasing proportion of ready-built hybrids (buildings that function as both warehouses and factories), as well as the anticipated completion of the first high-rise RBW on the market.

New projects push the average rent up slightly

• Average rent was recorded at USD 4.6 per sqm, per month, up slightly compared to the previous period, mainly due to the impact of rents in new projects. Meanwhile, existing projects’ rents remained stable and did not have any significant changes.
• Capital values, estimated based on gross asking rents, continued to experience a slight improvement, driven by higher gross rent on an aggregated basis. Market yields temporarily moved sideways in the face of the bleak macroeconomic conditions.

Outlook: Total supply by end-2024 to exceed 1.3 million sqm, up 18% y-o-y

• In H2 2024, the market is forecast to welcome another wave of new supply, with approximately 131,000 sqm entering the Bac Ninh and Hung Yen provinces. This will bring the total market stock to over 1.3 million sqm by end-2024.
• In H1 2025, the market is expected to rapidly expand thanks to new projects from large investors, including BWID, Frasers, KCN Vietnam, LOGOS and MEA. In general, the market will remain competitive, posing challenges for leasing activities.