Positive net absorption thanks to year-end effect and improvement of demand from manufacturer and 3PL tenants

• The market experienced positive momentum in H2 2024, driven by the year-end effect. Demand from the manufacturer and 3PL tenants showed a slight improvement. In 2024, demand had some positive signs; however, sentiment had not improved significantly.
• Net absorption in H2 2024 reached over 127,000 sqm, bringing the total net absorption of 2024 to 208,000 sqm, recording a slight decrease compared to 2023.

The market welcomes a new project in Bac Ninh province

• The market welcomed over 38,000 sqm of new supply from the SLP Park Thuan Thanh II project in Bac Ninh. This is one of the largest ready-built warehouse (RBW) projects being handed over this year in the region.
• Overall, for the year 2024, the new completion rate has been slowing down compared to the past three years, allowing the market to progressively absorb unoccupied space and maintain rent growth.

The average asking rent shows a slight uptick, driven mainly by prices at new projects

• The average asking rent experienced a slight uptick, reaching USD 4.63 per sqm, per month, a 0.21% increase h-o-h. This growth was primarily attributed to the asking rent at the new project, SLP Park Thuan Thanh II, and increases in some projects in Hai Phong.
• Capital value, estimated based on gross asking rents, continues its slight increase, driven by the introduction of high-quality new projects with higher-than-average rents. The market yield temporarily moved sideways amid the current gloomy macroeconomic conditions.

Outlook: Supply is expected to expand significantly in 2025, with two new developers entering the market

• The market is forecast to expand significantly in 2025. In addition to projects by existing key players, such as BWID, LOGOS, SLP and KCN Vietnam, the market expects to welcome two new investors, namely MEA and the Daiwa House–WHA Group partnership.
• Abundant new supply, coupled with demand that has not shown signs of significant improvement, is likely to lead to increased market competition. This could create challenges in leasing activities and slow down rent growth in the near-term.