Market Trends of Commercial Real Estate Industry in Vietnam
This section covers the major market trends shaping the Vietnam Commercial Real Estate Market according to our research experts:
Growth in Vietnamese E-commerce to Drive the Industrial Real Estate Market
The Vietnamese e-commerce market is projected to continue growing in the post-pandemic period. The e-commerce revenue in Vietnam reached USD 11.8 billion in 2020, posting a growth rate of 18%. The Vietnamese e-commerce market recorded the fastest growth rate in Southeast Asia. E-commerce is expected to continue thriving post the COVID-19 pandemic, creating new consumption trends.
Since the outbreak, the demand for online purchases through e-commerce platforms has increased sharply. By 2021, more than 70% of Vietnam's population accessed the Internet, of which nearly 50% of consumers tried online shopping, and 53% of them used e-wallets and online payment.
E-commerce, particularly in logistic services and express delivery focusing on e-commerce, is now a prospering sector for investors. Recently, 4PL (4th party) logistics providers entered the market by offering more custom solutions to customers who need more flexibility in their shipping needs. The demand for industrial park real estate from investors entering the Vietnam market is also high. In the past, they often needed to find a land fund to develop with a scale of 5,000-10,000 m2. Up to now, it has increased to 10,000-50,000 m2. The market is also expected to see a significant increase in cold storage demand in support of essential medical services, such as the rotation and storage of the new COVID-19 vaccine.
Workplace Real Estate Continues to Grow in Vietnam
Currently, the demand for coworking spaces in Vietnam is driven by start-ups, freelancers, and small corporations. The growing demand has attracted domestic firms, global firms, and investment funds to Vietnam. Such spaces will continue to expand in terms of supply and offerings and attract start-ups as tenants, including small corporations looking to minimize costs and increase flexibility.
By the end of 2021, the total stock of Grade A and B reached 1,596,448 sq. m (NLA) in Hanoi. In Q4 2021, asking rents remained stable in existing projects in both grades. Asking rents of existing Grade A and Grade B offices were maintained at USD 24.6 per sq. m/month and USD 14.0 per sq. m/month, respectively.
In Q4 2021, the Ho Chi Minh City (HCMC) office market recorded a good revenue trend in vacancy and rental rates. In 2022, the market is expected to have 96,000 sq. m of new NLA from two Grade B buildings and one Grade A building.
