Economic downturn takes a toll on industrial property market
The industrial property market in Vietnam is experiencing a slowdown due to declining foreign direct investment and manufacturing activity. In the first quarter of this year, the occupancy rate of industrial properties in the southern region decreased by 8 percentage points year-on-year, with ready-built factories and warehouses declining by 11 and 9 percentage points, respectively, according to Cushman & Wakefield.
JLL also reported that the southern industrial property market is entering a low demand period due to declining exports. The Vietnam Association of Realtors (VARS) attributed the market’s struggles to land clearance delays and a lack of accommodation for workers in industrial zones.
With global economic uncertainty, foreign investors are hesitant to invest, and in the first five months of 2023, foreign direct investment in Vietnam was 7% lower at $10.86 billion. VARS emphasized the importance of transparent government policies, simplified administrative procedures, and lower bank lending interest rates to help the industrial property market recover.