CBRE and BW joinly release a report on the emergence of multi-storey facilities in Vietnam

Over the last decade, Vietnam has emerged as one of the most sought-after manufacturing hubs across the region. The global geopolitical uncertainty has driven manufacturers to diversify their supply chain networks towards alternative hubs such as Vietnam.

In addition, Vietnam consumer spending is growing and is forecasted to continue to increase over the next few years, especially in terms of e-commerce. The e-commerce enjoys fast-paced annual growth of 25% during 2016 – 2021, and retail giants are also strengthening their foothold in Vietnam.

Given these, leasable areas are in high demand, while the potential supply-demand mismatch of warehousing space could be an issue. Limited industrial land bank, coupled with nationwide record low vacancy of 8% for land and 10% for warehouse, has amplified a structural shift towards multi-storey facilities.

In May 2023, CBRE released a special Joint Research Report with BW Industrial Development JSC. (BW) providing an overview of the Vietnam multi-storey warehouse and factory market, identifying potential opportunities and challenges, and assessing long-term trends that can help businesses adapt to production and supply network changes.

Development history: Multi-storey facilities have their roots in densely populated areas of Asia

A multi-storey warehouse or factory (hereafter called multi-storey facilities) consists of more than one floor, which supports a higher land utilization ratio and better operational efficiency. Floors above the ground floor are typically serviced by ramps, freight lifts, or conveyor systems, in which ramps allow trucks to access the different floors for loading and unloading cargo.

Multi-storey facilities have their roots in densely populated areas of Asia, in cities like Hong Kong, Singapore, Tokyo, Osaka or Shanghai, where demand is strong, but the land is constrained and expensive. It then appeared in Europe, the USA, and Australia due to its advantages.