Vietnam's increasing role in Japanese investors' global supply chains is driving up demand for industrial real estate in the country, a deputy minister said Tuesday.
The exponential growth of e-commerce has also spurred huge demand for warehouse real estate and logistics services, Deputy Minister of Planning and Investment Tran Duy Dong told an industrial real estate forum in Ho Chi Minh City, Vietnam’s southern economic hub.
“Therefore, Vietnam needs to focus on implementing measures to develop in-depth service industries. There should be more policies and mechanisms for the logistics and warehousing industry to become an important component of industrial real estate,” he added.
Vietnam is said to be one of the best investment destinations for industrial real estate in Southeast Asia. Citing a report published late last year by Google, Singapore’s state investor Temasek Holdings and global consultants Bain & Company, BW CEO Lance Li said Southeast Asia’s internet economy was forecast to reach $1 trillion by 2030, with Vietnam second only to Indonesia.
"E-commerce is a vital part in the internet economy, therefore warehouse real estate and logistics services would develop vigorously," he said.
Li added Vietnam was predicted to become Southeast Asia’s fastest-growing economy in 2022, with estimated economic growth of 6.5%.
Trang Bui, general manager of Cushman & Wakefield Vietnam, said: “The opportunities are there, but Vietnam has not reached its full potential.”
She suggested the country needs to improve its infrastructure network and administrative procedures. "And the government’s role in promoting education is very important. More attention should be paid to training human resources with skills and foreign language proficiency, as well as encouraging scientific and technical innovation."
"Compared to other countries, Vietnam’s labor force lacks the necessary physical and education levels at present. Workers are not equipped with the knowledge and skills to work in groups, are not able to cooperate and take risks, and are afraid of promoting initiatives and sharing work experience," a Cushman & Wakefield Vietnam report released last week stated.