Investment Report of Vietnam’s logistics industry in the first 7 months of 2021

Warehousing project for logistics has been licensed in the first 7 months of 2021

In the first 7 months of 2021, the warehouse project for logistics which has been licensed increased strongest in Q2 with 08 projects and about 159 million USD of registered capital. In Q1 the numbers were much more modest.

The warehousing projects for logistic from January to July 2021 located evenly in the North and in the South of Vietnam. In which, the registered capital poured into the North is slightly higher than in the South. The markets in the North and in the South are still attractive regions for investors when they select the investment location in Vietnam

Difficulties and advantages in the process of investing in logistics projects in Viet Nam

The trend of the Logistics and Warehousing industry is having a positive outlook, with high demand. At the same time, this is also a safe financial investment channel because land prices and rental prices tend to increase; construction and warehousing projects are quick and simple to deploy, without having to manage as much labor and complexity as production projects. It can be seen that this is a safe and quick investment direction for foreign capital sources, especially with these projects, the General Contractors can assist investors in finding land funds, completing legal procedures, management as well as implementation from planning, design, and construction.

In the development of land funds for logistics, it is still quite limited, with legal difficulties to apply for logistics purposes, some localities near big cities are not interested in logistics projects because they do not create many jobs and these projects have lower rent requirements. In addition, it is difficult to accurately determine the supply/demand linkages in each supply chain.

According to Mr. Nguyen Ngoc An, director of NEW CC CONSTRUCTION CONSULTANTS CO., LTD: Especially, investment projects in cold/frozen warehouses, it is necessary to have users before starting to invest or implement; because the cost of cold/frozen warehouse is very high, specific conditions with different needs (temperature for storage of food, fruit, meat, or for medicine, … have completely different requirements). Therefore, only when investors are users or partners with users, the investment in cold/frozen warehouse will be effective.”

Potential for investment and development of logistics projects in Vietnam’s provinces and cities

Due to the impact of the Covid-19 epidemic, from April 2020, airlines in Vietnam are allowed to convert passenger planes into cargo planes, serving domestic and international cargo transportation. Thus, among modes of transport, aviation recorded the strongest decline, as it was the hardest hit by travel restrictions between countries in the context of the complicated developments of the Covid-19 epidemic. Miscellaneous: warehouse serving the needs related to import and export, General goods storage facility, Cold storage/cool storage, smart warehouse/distribution center.

The total number of new projects (warehousing and logistics projects) in the past 7 months of 2021 is still mainly concentrated in the North and South of Vietnam. The land area for logistics is located mainly in the North and South (39% and 38% of total logistic land area accordingly). In Central, most of the logistic land is concentrated in Danang and Thanh Hoa.

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Gin Nguyễn- Vietnamconstruction

 

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