Attraction from domestic logistics market

Exciting race for investment in logistics infrastructure

In September 2023, a number of large-scale logistics projects have been put into operation in Vietnam. For example, French logistics giant FM Logistic inaugurated its second Vietnam distribution center in Bac Tan Uyen District of the southern province of Binh Duong. The new warehousing facility spreads across 20,000 square meters and expandable up to 50,000 square meters, and is equipped with 78 docks.

Many large-scale logistics projects have been put into operation in Vietnam

Hamza Harti, Managing Director of FM Logistic Vietnam, said that although the center has just come into operation, it already has many customers. The company will soon accelerate the investment process for the next phases in 2025.

Meanwhile, two subsidiaries of Transimex JSC - Long An Investment One Member Limited Liability Company and Long An Logistics JSC - held the inauguration ceremony of phase 1 of Long An cold storage at Vinh Loc 2 Industrial Park in Ben Luc District, Long An Province. Long An cold storage has a total area of 29,000 m2 and a capacity of 56,000 pallets. Nguyen Hoang Hai - Director of Long An Logistics Joint Stock Company, said after completing phase 1, the company will build a fully automatic cold storage area with a storage capacity of 40,000 pallets, and install a rooftop solar power system for cold storage operations to protect the environment.

Earlier, SPX, a delivery service provider with a freight forwarding network inaugurated a 100,000 sq.m automatic goods sorting center in the northern province of Bac Ninh. The center is able to handle up to 2.5 million parcels per day after phase 1, and is expected to reach five million parcels per day in phase 2. The Saigon Beer Trading Company Limited (SATRACO) also put into operation the Distribution Center project (HCM DC) in Ho Chi Minh City; and Lazada Logistics Vietnam opened the Lazada Logistics Park sorting center in Binh Duong Province.

Much room remains

According to the Vietnam E-commerce Report, the scale of the retail e-commerce market in Vietnam reached US$16.4 billion in 2022, accounting for 7.5 percent of the total retail revenue of goods and consumer services nationwide. It is estimated that Vietnam's e-commerce revenue in 2023 will reach US$20.5 billion, accounting for about eight percent of the total retail sales of goods and consumer service revenue in the country.

“Vietnam is becoming one of the world’s prominent manufacturing centers with an increasingly improved investment environment and major trade agreements being signed. Investment in infrastructure and logistics systems will also strengthen the supply chain for manufacturing businesses. Along with that, the positive outlook of the e-commerce industry and the continued increase in demand for fast delivery promise to be a premise for the logistics market to further develop in the near future with effective operating models and more optimized,” Thomas Rooney, Senior Manager, Real Estate Consulting Services, Savills Hanoi, commented.

Notably, according to research, the supply of warehouse space in the Vietnamese market, especially in the North, is still not much. Therefore, investors can consider high-rise warehouses or smart port warehouses.