Demand generally sustains a stable sentiment, with resilient leasing momentum

• Logistics warehouse demand generally sustained a stable sentiment during the first quarter, with new leasing engagements recorded across manufacturing, retail, and e-commerce occupiers serving both domestic and international trades.
• Resilient leasing momentum contributed to a significant net absorption of over 110,000 sqm in Q1 2026, reducing the vacancy rate to 16.7% – a decline of 2.85 ppts from the previous quarter.

Dong Nai (Dong Nai) province welcomes new supply

• The market commenced 2026 with nearly 50,000 sqm of new supply in Dong Nai (Dong Nai), introduced by KCN Vietnam. This addition increased KCN Vietnam’s market share within the prime RBW basket to 6.9% while also raised the total regional supply to 2.5 million sqm, as of Q1 2026.
• BWID and Mapletree retained their leading positions, accounting for 36.2% and 16.3% of total existing stock, respectively.

Average rental rate edges up slightly, while market yield holds a sideways trajectory

• Average rental rate edged up slightly by 0.5% q-o-q, reaching USD 5.07 per sqm per month.
• This modest growth was primarily supported by higher asking rents at well-performing projects, while most facilities have maintained rates steady or made minor reductions to accelerate occupancy.

Outlook: Fluctuating demand is predicted amidst geopolitical instabilities, yet the full extent of impacts remains uncertain

• In 9M 2026, the Southern market is expected to welcome nearly 136,000 sqm of new space across Dong Nai (Dong Nai) and HCMC (Binh Duong). Notably, Sembcorp is set to launch a hybrid project, underscoring its market share expansion and marking its official entry into the South.
• Instability arising from the Middle East conflict in early 2026 is foreseen to cause fluctuations in logistics demand. Domestic consumption will serve as a crucial backbone for economic resilience and market sentiment through year-end.