Southern industrial real estate occupancy down in Q1

The property consultancy firm Cushman & Wakefield Vietnam reports a decrease in occupancy rates across all southern industrial real estate segments in the first quarter of this year. The decline is attributed to economic challenges faced during this period.

Specifically, the occupancy rates of industrial parks, ready-built factories, and ready-built warehouses in the critical southern economic region dropped by 8, 11, and 9 percentage points, respectively, compared to last year.

Despite the decrease in occupancy, the rent for warehouses and industrial land in the region experienced an increase of 8.1% and 13%, respectively. However, the rent for ready-built factories declined by 3.3%.

JLL, a real estate consultancy, notes that the demand for ready-built warehouses in the South primarily came from domestic firms in the first quarter, while export activities remained sluggish.

Additionally, there were low occupancy rates observed in some newly developed ready-built warehouse projects.

Trang Bui, CEO of Cushman & Wakefield Vietnam, attributes the slowdown in the industrial real estate sector to global economic instability, weakening consumption, and decreasing export orders. Following a prolonged period of rapid growth, these factors have gradually impacted the demand for industrial real estate.

Bui predicts that the industrial real estate market will likely experience decreased demand, occupancy, and rent throughout 2023.

While rents for industrial land are expected to remain high, rents for ready-built warehouses may stabilize or even decline. This is due to a recent surge in supply coupled with falling demand amidst ongoing economic difficulties.

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