Are multi-storey warehouses and micro-fulfillment the right answer for Vietnam’s urban logistics?

From big-box on the fringe to multi-storey in the city

For decades, single-storey “big-box” sheds on the urban fringe were the default option: cheap land, easy truck access, high clear height. In high-density Asian cities, however, this model has reached its limits: land is scarce, and the distance from warehouses to consumers keeps increasing, driving up both delivery times and operating costs. Recent research on Asia-Pacific logistics real estate shows that “urban logistics facilities” and “multi-storey warehouses” have emerged as distinct segments, explicitly designed to address land scarcity while supporting faster e-commerce delivery.

In Japan, South Korea, China and Singapore, developers are now building 4–8 storey facilities with ramp-up truck access, heavy-duty freight lifts, rooftop parking and integrated office and value-added service areas such as labelling, light assembly and re-packaging. Vertical space is fully utilized, significantly increasing storage per square metre of land, but at the price of more complex engineering for floor loading, fire protection and traffic management.

Vietnam is only just entering this phase. JLL’s Q3 2025 market report on Northern Vietnam’s logistics and industrial market notes 313,000 sqm of new warehouse supply, bringing total modern stock to 1.79 million sqm, and highlights the introduction of two-storey warehouses in Bac Ninh with high technical standards, expanding tenants’ options. The report also identifies the development of multi-storey warehouses and smart logistics integration as a key medium-term trend, enabling better land utilization and operational efficiency.

In the South, several developers are reportedly studying two-storey concepts near key highway and ring-road interchanges where land costs have moved beyond what traditional single-storey sheds can justify. While such projects are still rare, they signal that “going vertical” is becoming a serious option rather than a curiosity seen only in Tokyo or Singapore.

Micro-fulfillment: “a store inside the warehouse” for same-day delivery

While multi-storey warehouses address the space challenge, micro-fulfillment targets speed. Market studies estimate the global micro-fulfillment sector at around USD 6.84 billion in 2025, potentially exceeding USD 21 billion by 2030, with annual growth of more than 25%, driven by booming e-commerce, urban density and the need to reduce labour costs in order picking.

Micro-fulfillment centers are small, high-density, highly automated nodes embedded in or close to residential areas, designed for rapid order processing and same-day – or even 10–15 minute – delivery. Instead of one giant distribution centre beyond the ring road, retailers split inventory across multiple MFCs, connected by digital platforms that orchestrate inventory and routes in real time.

India’s quick-commerce boom illustrates this model vividly: platforms such as Blinkit, Zepto, Swiggy Instamart and BigBasket Now are re-purposing basements, vacant plots and small high-street units into mini-warehouses to enable 10–15 minute deliveries. Amazon India, meanwhile, has announced plans to open two micro-fulfillment centers (dark stores) per day to expand its Amazon Now service, aiming for over 300 such sites by year-end and using AI to forecast hyperlocal demand. In South Korea, the transport ministry is piloting smart delivery projects in Seoul, using MFCs and small autonomous vehicles in dense neighbourhoods.

However, rolling out MFCs in Vietnamese cities will not be straightforward. High rents, tight and congested streets, and fire-safety and building regulations not yet tailored to small urban warehouses all pose challenges. There are also concerns about noise, security and delivery traffic in already crowded residential areas. Many experts therefore advocate piloting MFCs in shopping centres, commercial buildings or purpose-zoned plots, rather than uncontrolled conversion of basements and shop-houses into mini-warehouses.

Where does Vietnam stand on the Asian urban logistics map – and what next?

From a real-estate perspective, Vietnam is only taking its first steps into multi-storey warehousing and micro-fulfillment. In the North, JLL’s Q3 2025 report marks the arrival of the first two-storey warehouses in Bac Ninh, paving the way for a more vertical use of land. In the South, attention so far has centred on large, modern sorting centres at strategic gateways, while developing warehouses inside the city – close to residential catchments – remains limited, partly because suitable land and a supportive regulatory framework are still emerging.

The practical question is not whether Vietnam should adopt these models, but where, for which product categories and under what financial and operational structures.

First, for multi-storey warehouses, the key challenge is balancing higher construction costs with rent levels that tenants can afford. Such projects are best suited to tenants that need large, integrated footprints, such as 3PLs, omni-channel retailers or major e-commerce players with strong same-day delivery ambitions in urban and peri-urban areas. Ramp design, traffic flows, floor loading and rack heights need to be engineered from day one, otherwise expensive vertical space may end up being used like a normal low-bay shed.

Second, not all sectors need to be “hyper-close” through micro-fulfillment. Fresh groceries, FMCG, pharmaceuticals and fast fashion, with high purchase frequency and relatively healthy margins, are better candidates than bulky, low-margin goods. A widely used pattern is to combine MFCs with existing stores – turning part of a supermarket or convenience store into a “hidden warehouse” for online orders, leveraging the existing retail network as a dense grid of fulfillment nodes.

Finally, both multi-storey warehouses and MFCs only deliver their full potential when backed by data and digital management. Without smart order batching, multi-node inventory optimisation and route planning, running up and down multiple levels or operating dozens of small urban nodes can easily increase cost instead of reducing it. This is where order management systems, WMS, TMS and route-optimisation tools need to be scaled beyond the largest corporates to mid-sized 3PLs and retailers.

In that sense, the answer to “Are multi-storey warehouses and micro-fulfillment the right answer for Vietnam’s urban logistics?” is that they are important pieces of the puzzle, but not a magic bullet. Vietnam is entering a golden window to pilot these concepts in a few key urban–industrial corridors under flexible yet controlled regulatory sandboxes. Those who learn how to harness “height” and “proximity,” combined with genuine digital transformation of their supply chains, will gain a decisive edge in the race to deliver faster, cheaper and more reliably in the decade ahead.