Industrial realty adapts to disruption

Global economic and geopolitical volatility is generating widespread impacts across multiple sectors, with industrial real estate among the most affected.

- By Binh An

According to a Savills Vietnam statement released at the end of March, a “wait-and-see” sentiment is becoming more prevalent in real estate as energy prices place pressure on related industries.

Transactions have not disappeared, but negotiation timelines are lengthening as investors reassess costs and risks. This is seen as a short-term adjustment phase before the market reaches a new equilibrium, the statement said.

“This is clearly reflected in the manufacturing sector, the backbone of industrial real estate. Rising energy costs are driving up logistics, transportation, and input expenses, directly squeezing corporate profit margins. Under such pressure, many corporations are forced to adjust expansion plans, and even delay decisions on land leasing or new factory development,” the statement stated.

Unlike other real estate segments, industrial property is closely tied to manufacturing efficiency. When corporate investment slows, demand for industrial land leases also declines correspondingly.

From a supply chain perspective, rising cost pressures are driving a structural shift. Companies are increasingly diversifying production locations, shortening transport routes, and reducing dependence on international logistics corridors that are vulnerable to disruption.

Vietnam is not immune to these impacts, but the effects are mainly indirect through costs and supply chains. According to Troy Griffiths, senior advisor at Savills Vietnam, the most immediate pressure in the short term will come from supply chain costs, as rising energy prices spill over into logistics, transportation, and production inputs.