Word Street Journal

Specifically, recently, there has been a highly increased need for a small-sized warehouse in Southeast Asia. Several factors have caused this growth, the growth of the e-commerce sector, manufacturing exercises, and constant urbanization of the region. For businesses that are seeking ways to optimize their supply and distribution networks in Southeast Asia, here is some information about the pros and cons, locations, and crucial information to get the best outcomes.

Market Overview

Small-sized warehouses in the Southeast Asia industry are on the path of growth. Some of the countries that are slowly but surely taking the lead in this expansion include Vietnam, Thailand, Malaysia, and Indonesia. The development of online purchasing has been critical, as it has increased the demand for distribution centers to be closer to the final customers. Also, the rise in production activities and improvement in the economy through attractive policies and foreign direct investments have boosted the market for warehousing facilities.

Vietnam has gradually become one of the key markets, with Ho Chi Minh City and Hanoi as the industrial zones that could provide small-sized warehouses. The location of Thailand and some of its cities, like Bangkok and the Eastern Economic Corridor, is strategic, which makes it easier for firms to secure efficient warehousing services. The strategic areas of Malaysia include Kuala Lumpur and Penang, while the important links in the supply chain are located in Indonesia, including Jakarta and Surabaya.

Advantages of Small-Sized Warehouses

Opting for a small-sized warehouse in Southeast Asia offers several benefits:

• Cost-Efficiency: It is worth noting that small-sized warehouses are relatively cheaper for rental than large ones. This makes them affordable to businesses that do not require large amounts of storage space.

• Flexibility and Scalability: Such warehouses offer the ability to expand the operating scale or minimize it to the market’s needs. This functionality is most advantageous because some businesses experience fluctuations during a particular season.
• Proximity to Urban Areas: Most of them are small in size and situated close to urban regions, making it easier to perform last-mile delivery and minimize the cost of transportation.

Types and Features of Small-Sized Warehouses

Understanding the different types of small-sized warehouses can help businesses choose the right facility:

• Standalone Warehouses: Suitable for organizations that need a facility for warehouses that will be used solely by their company. These provide privacy and control over the environment in which the storage is being done.
• Multi-Tenant Warehouses: These warehouses may be used by several businesses, making it economical for them. This option is concise for companies who need more storage space for their products.
• Shared Warehousing Solutions: As for shared warehouse management, the space is split depending on the requirements that may be presented by different companies. This option is flexible and cheap in the long run.

Also, when selecting a small-sized warehouse, consider the following features:

• Location and Accessibility: A suitable warehouse must be located in a convenient area with easy access from a well-frequented transport network.
• Infrastructure and Facilities: It also should have necessary loading docks for loading stocks, storage racks that are needed to stock the various goods, and climate control to favor stocks that may be sensitive to climate change.
• Security Measures: Security systems like CCTV and physical locks are critical when the items are stored because theft becomes a considerable threat.
• Technology Integration: The use of technologies like Warehouse Management Systems (WMS) in warehouses improves operation efficiency

Leasing vs. Buying

Deciding whether to lease or buy a small-sized warehouse depends on several factors:

• Pros and Cons of Leasing: They require less invested capital and are easier to manage, which is why leasing is more suitable. It permits a business to switch or expand its operations. However, leasing may require the client to incur regular rental costs and may also may allow the client to customize products to large extents. 

• Pros and Cons of Buying: It is always wiser to own a property, as this gives long-term stability and more control over the warehouse. It can be profitable if the property holding costs rise. The weakness of purchasing is that it also demands a large amount of investment and might not offer as much flexibility.

Economic factors have a very significant impact on such a decision. Any decision should be made based on the following factors, including business requirements, financial capability, and the market environment.

Finding the Right Warehouse

Selecting the right small-sized warehouse in Southeast Asia involves careful evaluation:

• Key Factors: Some examples of physical attributes may include location, size, cost, additional features or facilities,… Accessibility to suppliers, customers, and, thus, means of transport, is a requirement.
• Site Inspection Tips: Carry out a comprehensive checkup to determine the state of the warehouse. Examine its physical soundness and cleanliness, then determine if it conforms with the rules and regulations that are legal or required for running the business.
• Working with Reliable Real Estate Agents: Sponsoring an industrial real estate agency during the whole process of finding reliable sources can take a lot of effort and time, but certain sources can make the process smoother. These agencies will have vast knowledge of the market and ways in which things can be approached.

The Future of Small-sized Warehouses in Southeast Asia and Successful Case Study

The future of the small-sized warehouse in Southeast Asia looks promising, driven by several trends:

• Impact of E-Commerce Growth: The trend of e-commerce will persist, which will cause the need for more small-sized warehouses in the vicinity of cities for faster delivery.
• Technological Advancements: Currently, the use of automation, artificial intelligence, and IoT is quickly changing the face of warehousing. These technologies increase productivity, decrease expenses, and optimize the inventory.
• Sustainability Practices: Sustainability is the new trend within the warehousing industry. People are also becoming conscious of the environment, and the business world is turning green by installing energy-efficient lights, and solar panels. They are also starting recycling campaigns.

Successful examples of using small-sized warehouses in different industries and markets of Southeast Asia are shown in the following cases. For instance, an e-commerce firm operating in Vietnam made changes to the company’s supply chain network and decided to use a small warehouse located in Ho Chi Minh City. They managed to improve the order fulfillment cycle and hence provide quality output to their customers.

Conclusion

Therefore, many benefits can be derived from a small-sized warehouse in Southeast Asia, including cost-efficiency, flexibility, and strategic location advantages. In both cases, it is possible to identify viable options for rental or purchase that can satisfy a company’s storage requirements. As a result, certain decisions will be enhanced and provide the basis for developing the subsequent stage of supply arrangements.

If you are exploring a small-sized warehouse for lease for your businesses, Savills Industrial Vietnam will be your professional partner to align yourself with the Vietnam industrial property market. Contact us today to get more information on how Savills Industrial can help you increase warehousing optimization and your business outcomes.