Demand remains steady with positive net absorption

• Demand for logistics warehouse remained steady during the first quarter, bolstered by activity at newly launched projects in strategic locations. Manufacturing and retail tenants drove the majority of new leasing transactions.
• Q1 net absorption remained positive at approximately 96,000 sqm, nearly double the figure recorded during the same period last year. This growth was driven primarily by leasing activity in Hai Phong and Hung Yen provinces.

Supply pipeline remains robust with continued additions

• The market showed significant expansion with 162,000 sqm of new supply, pushing total stock to nearly 2.2 million sqm. This growth was driven by two projects: BWID Pho Noi A and Jeil Logistics Hai Phong, with the latter marking Korean developer Jeil Group’s market entry.
• Abundant supply created upward pressure on vacancy as the market required time to absorb new leasable area. The occupancy rate declined marginally to 64.6% as of Q1 2026.

Average rental rates maintain an upward trajectory

• Asking rents rose 3.9% q-o-q to USD 5.12 per sqm per month, driven primarily by premium pricing from newly launched developments and rent escalations at some projects owing to good performance.
• Capital values, derived from gross asking rents, continue experiencing moderate appreciation, underpinned by sustained upward trend on average rental rates.

Outlook: Supply is projected to expand substantially while market sentiment becomes increasingly cautious

• The Northern Ready-Built Warehouse market is poised for substantial growth over the next three quarters of 2026, with approximately 550,000 sqm of new space launching, primarily in Bac Ninh and Hung Yen from key developers including Mapletree, SLP, and IDEC Group.
• While early 2026 information of Middle East tensions may prompt more cautious sentiment among developers and tenants, the actual impacts remain unclear. Demand is expected to stabilize with manufacturing and domestic consumption continue to be the primary drivers.