Future Cities
2022 Global Seaport Review: Ho Chi Minh City, Vietnam
Navigating evolving global seaport regions and their impact on industrial real estate
December 13, 2022 4 Minute Read
The Cat Lai Terminal’s strategic location near major industrial hubs plays a critical role in the development of the Ho Chi Minh Greater area. Its importance will grow as new mega infrastructure projects are completed, connecting the terminal to cities throughout Vietnam.
Overview
The Port of Ho Chi Minh City (HCMC) is Vietnam’s biggest port by container volume and is the 20th-largest globally. The port grew its container throughput by 13% to 8.9 million TEUs in 2021.
Ownership of the port infrastructure in HCMC is fragmented, with various operators managing smaller ports in and around the city. Key cargo handling terminals include Cat Lai, Saigon and the Vietnam International Container Terminal (VICT). Most container terminals are managed by state-owned enterprises.
The Cat Lai Terminal accounts for approximately half the country’s total container volume, but has become increasingly congested. In May 2022, the United States Agency for International Development (USAID) and the General Department of Vietnam Customs (GDVC) released an action plan for reducing congestion by upgrading technology and expanding port facilities to improve efficiency and operational performance as part of the five-year, $21.7 million USAID Trade Facilitation Program. The program runs until 2023 and is aimed at supporting Vietnam in developing a more attractive trade and investment climate.
Figure 1: TEU volumes
Source: CBRE Research, Lloyd's List One Hundred Ports 2021.
Figure 2: Population demographics
Source: macrotrends.net, 2022.
The fast-growing regional hub saw growth in throughput despite the pandemic
Port features
HCMC’s port infrastructure is fragmented, with various ports and terminals around the city. The Cat Lai Terminal occupies 60 hectares (148 acres), with a quay length of approximately 1.2 kilometers, a 12-meter (39-foot) depth and around 20 quayside gantry cranes. The terminal was also the first port to be granted free port status in Vietnam.
In 2022, Cat Lai became Vietnam’s first green port, following its replacement of diesel-powered lifting equipment with greener, electric-powered machinery, reducing carbon emissions and operating costs. According to Vietnam’s Ministry of Transportation, all ports developed from 2030 must adhere to green port standards. In 2022, it was reported that the Mediterranean Shipping Co. (MSC) expressed interest in building a $6 billion port in Can Gio, south of HCMC. The port would be able to accommodate post-Panamax vessels, with a total annual throughput capacity between 10 million and 15 million TEUs, which would make it Vietnam’s largest port.
Figure 3: Port details
Source: CBRE Research, Port of Ho Chi Minh City, 2022.
Trade partners
Vietnam’s top five import trading partners by value are Mainland China, South Korea, Japan, Singapore and Hong Kong SAR. Its top exporting partners are the U.S., China, Japan, South Korea and Germany. Key exports from Vietnam include electronics, particularly mobile telecommunications, textiles and footwear. Key imports include circuitry, electrical components and petroleum.
Intermodal transportation
The modern Long Thanh Dau Giay Expressway and Highway 51 connect HCMC’s ports with key industrial zones across Vietnam. In addition, there are extensive barge networks, with transit between Phnom Penh, Cambodia, taking around 48 hours.
There is currently no rail network connecting the individual ports and terminals, so freight must be transported by road or barge, increasing costs.
Real estate influence
HCMC’s seaport has supported strong industrial development, especially at the Cat Lai port. Land prices near ports are approximately 10% to 15% higher than the average level of the city. This rate is expected to accelerate further when roads directly connecting to the Cat Lai port area and Hiep Phuoc port are fully renovated by 2025.
Demand for warehouse and factories, and for industrial and warehouse land leases has picked up. Manufacturing and trading-related occupiers are focused on regionalizing their supply chains and nearshoring within the region.
After the country reopened its border earlier this year, construction began on several industrial projects. Industrial land supply in the Southern region is expected to increase to nearly 40,000 hectares over the next three years, of which one-fifth will be in second-tier industrial provinces like Binh Thuan, Bà Ria–Vũng Tàu and Binh Phuoc.
Figure 4: Industrial & logistics market stats
Source: CBRE Research, H1 2022.
Explore Global Seaports by Port
The Port of Singapore is the world’s second-busiest container port, handling 37.5 million TEUs in 2021.
The Port of Hong Kong is one of the world’s 10 busiest container ports, though TEU volumes have declined since 2017.
The Port of Shanghai is the world’s busiest container port.
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