For the year 2022, Vietnam's GDP growth is recorded at 8.02%, exceeding the forecast of most international economic organizations (6.5% - 7.5%), and at the same time also the highest increase in the period 2011-2022. GDP per capita in 2022 is estimated at 95.6 million VND/person (equivalent to US$4,110, up US$393 compared to 2021). The consumer price index was at 3.15%, still under control at 4% according to the target set by the National Assembly.
Vietnam will still face multiple hurdles in 2023, mainly due to its open economy and thus reliance on other major markets which are also going through periods of stagnation or the first stage of recession, rising inflation, and monetary policy tightening in many countries.
According to the Ministry of Planning and Investment, realized FDI capital reached the highest level in the past 5 years at US$22.4 billion, up 13.5% over the previous year. The sectors attracting FDI are manufacturing & processing, manufacturing 61%, real estate 16% and technology, electricity and other 23%. Leading countries in terms of the total registered capital: Singapore (23.3%), South Korea (17.6%), Japan (17.3%).
In 2022, the US Federal Reserve (FED) went through 4 interest rate hikes with a jump of 0.5-0.75 percentage points each time, currently at 4.25%-4.5%. In mid-December, the FED is expected to continue to raise interest rates in 2023 with no reduction until 2024, albeit at a slightly lower rate than before (0.5 percentage points), with a set target at 5.1%. However, before that, investors forecast interest rates could reach 6% in the negative scenario.
Contrary to the global trend, the domestic exchange rate and interest rate did not fluctuate much. On the contrary, it tends to decrease slightly in 2023 thanks to effective and timely actions of the government in the last two months of the year. : 2 exchange rate adjustment sessions, 4 times of USD price reduction at the Business Center to reduce exchange rate pressure, inject liquidity into the system and stabilize interest rates in the coming time; closing the buying rate in USD; credit extension; direct deposit interest rates and begin to gradually reduce lending rates.
In the last quarter of 2022, Cushman & Wakefield recorded a continued upward trend in rents across all industrial real estate segments in the southern market. However, the occupancy rate decreased due to new supply entering the market, and the demand for ready-built warehouses showed signs of slowing down.
Total supply of industrial park land for lease reached 28,170 ha, up 1% compared to the previous quarter and 12% over the same period last year. The occupancy rate was close to 81% stable QoQ and down 5 percentage points YoY. The average rental price reached US$159/sqm/lease cycle, up 3% QoQ and 10% YoY.
The supply of ready-built factories reached about 4,820,000 sqm, up 11% QoQ and 17% YoY. The occupancy rate was close to 80%, down 6 percentage points compared to the previous quarter and last year. The average rent is US$4.6/sqm/month, stable compared to last year and the previous quarter.
The supply of ready-built warehouses reached 5,000,000 sqm, up 9% QoQ and 39% YoY. The occupancy rate was nearly 76%, stable compared to the previous quarter and 9 percentage points lower than last year. The average rent was US$4.4/ sqm /month, up 1% QoQ and 10% YoY.
The ready-built warehouse sector recorded 300.000 sqm of new supply, mainly in Dong Nai and Long An. Occupancy rates in most of the industrial segments mostly fell due to new supply entering, although the occupancy rate of the warehouse segment dropped sharply due to sluggish demand, especially in the export sectors.
From 2023 onwards, the market will receive an abundant supply of warehouses. Meanwhile, the supply of industrial land will become limited in 2023 due to lengthy legal proceedings. The new supply will put pressure on warehouse rents, leaving future rents unchanged or even reduced.
As land prices increase, investors will look to locations with more attractive prices such as Binh Phuoc, Binh Thuan, and Can Tho. Cushman & Wakefield forecasts the future supply of industrial zones is about 27,000 hectares, ready-built factories are about 4.1 million sqm and ready-built warehouses are about 2.8 million sqm.
In the last quarter, the leasing division of Cushman & Wakefield recorded large-scale rental demand from businesses, up to 20,000 – 50,000 sqm. In addition to location and price, businesses gradually pay more attention to technical standards and facilities, improving customer service quality, and especially environmental factors and sustainable development goals like Net Zero, renewable energy and circular economy.
