HANOI: Foreign developers are dominating the warehouse market in Vietnam, accounting for over 75% of the country’s market share at the end of 2023.

Despite the global economic downturn, Vietnam’s warehousing sector continues to expand.

The growth is driven by increasing demand for cold storage, especially from the seafood and fresh-food processing industry, which accounts for 70%-80% of the demand for cold storage in Vietnam.

According to a new report from market researcher FiinGroup Vietnam titled Vietnam Logistics: Aggressive expansion of foreign investors, warehousing remains the most attractive logistics segment in Vietnam thanks to strong commercial, manufacturing and retail activity, including modern trade and food services.

By the end of 2023, Vietnam’s logistics industry was using nearly 3.9 million square metres of floor space. The annual growth rate from 2020 to 2023 was 23% and is expected to remain high in the next few years. Warehousing remains the most important field in Vietnam’s promising logistics segment, attracting both local and foreign investors.

The report noted that in recent years, Vietnam’s modern warehousing market has recorded active participation of both domestic and foreign investors, with the development of large-scale logistics chains. The country’s top five players include Mapletree, SLP, JD Property, Gemadept and Transimex.

However, foreign investors are dominating the modern warehouse market in Vietnam, accounting for over 75% of the market share of warehouse and factory floor space for rent in 2023.

The top three foreign players alone, including Mapletree, BW Industrial and SLP, account for 46% of the total modern warehouse rental area of ​​the market.

Currently, domestic enterprises account for more than 25% of the market share. The top three local leading players - ICD ST, NPL Logistics and Gemadept - account for 10.6% of the total warehouse rental area.

According to FiinGroup, there are about 25 warehouse projects that will be developed from now through 2027, with a total additional area of ​​1.87 trillion square metres. The annual growth rate of the modern logistics area is forecast to remain at 7% during this period.

BW Industrial will deploy a large project in Dong Nai Province in 2026, with an estimated effective floor area of ​​243,000sq m. Mapletree will also deploy a project in Bac Ninh Province in 2025, with an estimated effective area of ​​198,000sq m.

Modern logistics are concentrated in production and logistics centres in the top five major provinces, including Binh Duong, Long An, Bac Ninh, Hung Yen and Dong Nai.

Currently, both domestic and foreign investors are pouring large investments into logistics development. Mapletree is actively expanding its warehouse portfolio in Vietnam with major logistics centres in Bac Ninh, Hung Yen and Binh Duong provinces.

Each centre has 12-24 warehouses. Two rising stars in Vietnam’s modern warehouse market, BW Industrial and NPL Logistics, operate 22 new warehouses in both northern and southern Vietnam.

Infrastructure development, along with the increase in modern warehouses in Vietnam, is partly being driven by giant manufacturers and modern retail chains globally. The demand is supported by the growth of eCommerce and global supply-chain restructuring.

Local governments are planning to expand land for industrial parks to attract investment, including in Long An, Dong Nai and Bac Giang provinces.

 - ANN