‘Prime’ time for logistics

If there was ever a time that logistics was 'in', that time is now. The reliance and need for logistics space is at an all-time high, driven by advancements in the e-commerce sector.

October 22, 2018

18 October 2018 - If there was ever a time that logistics was 'in', that time is now. The reliance and need for logistics space is at an all-time high, driven by advancements in the e-commerce sector.

Logistics is a crucial component of the Vietnamese e-commerce market to succeed and reach its full potential. Many foreign logistics providers and e-commerce operators are making efforts not to miss an opportunity to offer e-logistics and meet the rapidly growing demand.

The heightened emphasis on supply chain efficiency and effectiveness over the past 12 months in a bid to deliver goods with speed and agility for consumers has, and will continue to have, positive spillover effects on the industrial property market.

Stephen Wyatt, Country Head of JLL Vietnam comments: 'With considerable growth in smartphone penetration in major cities, the e-commerce market will  grow significantly as the shopping trend via smartphones keeps increasing every year, resulting in the resonant expansion of this market and more pressure on the logistics industry. Many e-Commerce firms are picking up the pace to keep up with the demand from customers.'

A "prime" example of fulfilling this customer value proposition is Amazon.

This year's Amazon Prime Day was one of the largest global shopping events in Amazon history – taking place across 17 countries with more than 100 million products purchased. That is a lot of physical goods circulating within warehouses and being transported across local, domestic and international distribution networks.

Major e-commerce and logistic players have been on the move to secure logistics space to efficiently fulfil orders – encompassing orders domestically received and/or orders that require overseas export distribution.  This has spurred a renewed appetite for pure industrial space in inner ring locations – optimal for the last leg of delivery.

Sydney, being the most densely populated city in Australia and having the most constrained supply of industrial land, has recorded the strongest rate of annual take-up of industrial space within the inner sub-markets.  Between 2013 and 2017, industrial take-up within Sydney's inner locations by transport, logistics and e-commerce sectors has recorded a five-fold increase.

There is no doubt that major e-commerce players will improve their offerings and further develop and expand their logistics and supply chain network in global. This, along with the projected growth in the e-commerce sector, will ultimately mean an increasing volume of physical goods circulating – and industrial space is at the forefront in capturing the positive spillovers from this expansion.

About JLL

JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of over 91,000 as of March 31, 2019. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.

Want more? Talk to the team