Mega A Logistics Fully Meets Strong Increase in Warehouse Storage Demand

It can be said that the explosion of e-commerce combined with the sensitive economic and political situation has caused many businesses to face the problem of maintaining a stable supply chain for a long time.

Moreover, we cannot avoid the situation of warehouse supply scarcity that is increasing rapidly because businesses implement policies to strictly control the amount of goods to promptly meet the needs of global consumers. bridge.

So what is the way that a Logistics service company like Mega A Logistics and businesses solve the above problem? Refer now!

1. Demand for Storage Increases as Uncertainty Continues

Before looking at the warehouse market in our home country, Mega A Logistics Vietnam will show you the overall picture of the storage rental needs of the world’s powers! Over the past 2 years, 61% of companies in the world have increased the amount of storage of necessary goods in the past 2 years, increasing the need for warehouse storage.

According to Savills statistics, the online sales market in Europe will account for 25% of total spending by 2025, up sharply from 10% in 2020.

The main driver of this trend, in addition to the development of e-commerce, is also the race to expand warehouse space to ensure the supply chains of international companies.

E-commerce in Europe is truly booming, far exceeding the predictions of many experts. Typically, Amazon continues to expand its area in the Spanish and Polish markets. It is also a sign that the demand for goods storage and e-commerce logistics is about to enter a strong boom period.

McKinsey’s survey shows that nearly 75% of companies have fully prepared inventory in large warehouses. The rest are still in the process of finding suitable warehouse locations. Therefore, the warehouse occupancy rate around the world has also increased significantly. That is why 4.4% and 3.5 are the empty warehouse indexes in the supply chain in Europe and the US respectively.

To solve this situation, for example in the US, people use the land of abandoned Grade A office buildings to build industrial parks.

Experts also say that warehouse rental prices will increase sharply in many areas and may affect operating and labor costs. In particular, this amount only accounts for about 5% of the total cost of transportation and labor costs.

According to JLL, in the first quarter of 2022, activities in the logistics and industrial sector increased by 3.5% over the same period last year, earning 8.3 billion USD in capital deployed in the first quarter of 2022.

2. The Mayor of Vietnam’s warehouse is also fully stocked

Mr. John Campbell, Deputy Director, Savills Vietnam Industrial Services, said that from the end of 2021 until now, Vietnam’s reopening of borders and visa exemption for citizens of 13 countries is very meaningful when Companies can come see the project directly, sign lease contracts, set up facilities in Vietnam…

The Vietnamese government is encouraging companies to move to Vietnam, especially in high value-added industries, with tax incentives for technology or R&D companies, renewable energy and smart agriculture. . This means that in the near future, demand for industrial and warehouse real estate will increase sharply.

Reality in the industrial park and logistics market in Ho Chi Minh City and the Southern provinces shows that the market for ready-built factories and ready-built warehouses has a positive growth rate, with supply reaching 4.14% respectively. million m2 of floor space and 3.52 million m2 of floor space, according to Cushman & Wakefield Vietnam.

This unit also recorded the average factory rent of 4.7 USD/m2/month (equivalent to 107,000 VND), down 1% quarter-on-quarter and up 4% year-on-year.

Warehouse rental price is 3.9 USD/m2/month (equivalent to 90,000 VND), increasing 1% quarterly and 5% annually.

The occupancy rate as of the first quarter of 2022 of ready-built factories reached 94%, up 23% quarter-on-quarter and up 1% over the same period, thanks to leasing deals from the textile, garment and component manufacturing industry group. electronics in Binh Duong and Dong Nai.

For ready-built warehouses, the occupancy rate reached 93%, up 7% quarter-on-quarter and up 3% year-on-year. Typical transactions come from the e-commerce, 3PL and retail industries.

The total supply of industrial land in Ho Chi Minh City and 4 key southern provinces including Dong Nai, Long An, Binh Duong and Ba Ria Vung Tau, remains stable at approximately 25,200 hectares, up 1% year-on-year.

The average industrial land rental price reached 135 USD/m2/lease term (equivalent to 3.09 million VND), stable quarter-on-quarter and increasing 3% year-on-year. Occupancy rate increased 2% over the previous quarter and increased slightly 4% over the same period, reaching 89%, driven by manufacturing and logistics tenants.

For cold logistics, food and pharmaceuticals are key demand drivers. At the end of the first quarter of 2022, the total market supply reached 820,000 pallets, an increase of 1% over the same period. This volume of pallets has reached a 95% occupancy rate, with an average rental price of 0.88 USD/day/pallet (equivalent to 20,000 VND), an increase of 3% over the same period.

In the North, JLL Vietnam recorded that in the first quarter of 2022, the occupancy rate for the ready-built factory sector reached 98%, the rental price reached 4.7 USD/m2/month, an increase of 3.5%. compared to the same period last year.

In northern industrial parks, the occupancy rate this quarter remained at 80%, a rapid increase compared to 75% in the same period last year.

The average industrial land price in the first quarter of 2022 reached 109 USD/m2/lease cycle, down slightly compared to the previous quarter, but still maintaining a rapid increase with an increase of 9.2% over the same period last year.

According to Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam, it is estimated that about 23,000 hectares of industrial land supply will enter the market.

The factor driving the industrial real estate market to become vibrant is that investment capital in Vietnam’s manufacturing sector has grown significantly in recent years, thanks to lower costs than China, with high prices. Average export turnover increases by 11% per year from 2017 to 2021.