Rental prices skyrocketed

According to the latest report on cold supply chain of Savills, the explosion of e-commerce in the context of the Covid -19 pandemic is driving the demand for cold storage rental in Vietnam. However, because this segment is quite picky about customers, the supply is quite small, so the current supply cannot meet the demand, leading to the phenomenon of cold storage rental real estate prices skyrocketing.

Specifically, in the southern region, the rental price of cold storage from 52 USD (1.18 million VND)/ton in the first quarter of 2020 has increased to 87 USD (nearly 2 million VND)/ton at the beginning of the fourth quarter. , which is nearly doubling within 24 months.

In Hanoi, the rental price of warehouses and factories in the West of Hanoi and the South of Hanoi has increased by nearly 30% since the beginning of 2020 until now; In areas near the city center, the rental price increases from 40 to 50%.

Specifically, if at the beginning of 2020, the rent of warehouses in My Dinh area fluctuated between 70,000 - 90,000 VND/m2/month, but now it has increased to about 90,000 - 120,000 VND/m2/month. In some areas such as Phu Dien, Tay Tuu (North Tu Liem), the rental price from 40,000 - 70,000 VND/m2/month increased to 50,000 - 80,000 VND/m2/month within nearly 2 years.

“The price of warehouse for rent in the area of ​​Thang Long, An Khanh, and La Phu avenues of Hoai Duc 2 years ago was about 40 - 60,000 VND/m2/month, but now it is about 50,000 - 90,000 VND/m2/ month, depending on warehouse and yard conditions," said Mr. T, a broker and warehouse-leasing owner in La Phu.

Supply not enough demand

According to experts, industrial real estate and logistics have always been considered a potential market for investors in recent years. However, the cold storage segment is quite picky about customers, and that's why the supply is relatively scarce in most of the Asia-Pacific region in general and Vietnam in particular.

Especially, since the Covid -19 pandemic appeared and spread on a large scale, causing our country to have to implement prolonged periods of distance, people's shopping habits changed because of the restriction of large gatherings, so gradually Switching to online shopping and going to the online market caused a sudden increase in demand for cold storage.

Therefore, the cold storage real estate market in Vietnam is moving in the direction of supply that cannot keep up with demand. In addition, at present, the supply of cold storage is mainly concentrated in the southern provinces, operated by small and medium-sized suppliers, of which about 60% of the market share is held by foreign investors. outside.

According to JLL, the reason for the limited supply of cold storage in Vietnam is partly because cold storage facilities take longer to build than other types of logistics real estate. The construction of cold storage warehouses will be more complicated and expensive than standard warehouses. The investment cost of cold storage is two to three times higher than that of a conventional warehouse, and the construction process can take up to six months. Besides, the lease term usually lasts 15-20 years, making the supply even more scarce.

Many experts and JLL forecast that cold storage demand will continue to grow strongly for at least the next half decade as Vietnamese consumers are changing their shopping behavior since the historical upheaval of the pandemic. This means opening up many opportunities to attract investment capital into the niche real estate market as cold storage in the future.

Savills and many other units believe that the cold storage market in Vietnam is expected to be worth US$295 million by 2025 with a growth rate of 12% per year. However, at present, despite the great demand, the supply of cold storage in our country is in short supply because there are only 48 establishments, with about 600,000 shelves; refrigerated transport only recorded more than 700 trucks and refrigerated container trucks.

Source: NDH

(Translated by Google)