Cold storage rent soars as supply dwindles
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Rent for cold storage in the south stands at $87 per ton in Q4, up 1.67 times against Q1 last year due to limited availability.
Vietnam’s e-commerce boom amid the Covid-19 outbreak has fueled demand for cold storage facilities, according to the latest report on the cold supply chain released by real estate consultancy Savills Vietnam.
According to the cold storage warehouse report by real estate services provider JLL, more consumers have opted for online shopping during Covid-19, leading to bigger demand for cold storage warehouses mainly located in the south and managed by medium- and small-sized suppliers. Foreign investors currently hold a share of some 60 percent in the local cold storage market.
Trang Bui, JLL senior director in charge of the Vietnamese market, predicted demand for cold storage warehouses would increase sharply in the next five years, opening opportunities for investors.
The country currently has a meager 48 cold storage warehouses with some 600,000 shelves, and over 700 refrigerated trucks.
The local cold storage warehouse market is projected to annually grow 12 percent to reach $295 million in 2025, stated Savills Vietnam.
Questions & Answers
Q.What factors are driving the increased demand for cold storage facilities in Vietnam?
What factors are driving the increased demand for cold storage facilities in Vietnam?
Vietnam's e-commerce boom during the Covid-19 outbreak has significantly increased demand. More consumers opting for online shopping has led to a greater need for cold storage, particularly in the south of the country.
Q.How much has cold storage rent increased in the south, and what is its current rate?
How much has cold storage rent increased in the south, and what is its current rate?
Rent for cold storage in the south has risen 1.67 times compared to Q1 last year. It currently stands at $87 per ton in Q4, primarily due to limited availability in the market.
Q.What is the projected growth for Vietnam's cold storage warehouse market?
What is the projected growth for Vietnam's cold storage warehouse market?
The local cold storage warehouse market is projected to grow annually by 12 percent. This growth is expected to lead the market to reach a total value of $295 million by the year 2025.
Q.Who manages the majority of cold storage facilities in the southern region of Vietnam?
Who manages the majority of cold storage facilities in the southern region of Vietnam?
The majority of cold storage facilities in the south are managed by medium- and small-sized suppliers. This is in response to the increased demand for such services driven by online shopping during the pandemic.
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