Industrial property continues expanded to welcome Foreign Direct Investment (FDI)

FDI capital continuously flows intro industrial property. According to Cushman & Wakefield, it is estimated that from now to the next 3 years, about 6000 hectares of land in the industrial park will be launched.

Ready-built warehouse and factory market

The ready-built warehouse and factory market will have additional supply in the future. Respectively 1.4 million per square meter and 19 million per square meter. Of which, 55% of future supply is located in Dong Nai province. Industrial property market recovers thanks to new FDI inflows intro Vietnam and increased domestic consumption. It is known that the demand comes from many different industries. From traditional industries such as platics, vehicle manufacturing and animal feed to high value-added industries such as electronics and pharmaceuticals.

Ms. Trang Bui – General Director of Cushman & Wakefield commented: “It is thanks to positive market sentiment that capital into industrial land has reached 79 hectares in the first 6 months of the year. In the coming time, the prospect of a market with many bright colors for industrial property. Domestic and foreign investor and manufactures are gradually catching up with the shifting trend. When looking tho further provinces in the Central region and the Mekong Delta region thanks to competitive land prices, an active FDI attraction strategy and a constanly improving infrastructure system”.

According to data from the Foreign Investment Agency. As of the end of July, total FDI capital in Vietnam reached 18 billion USD; up to 10.9% compared to the same period last year. It is known that 70.4% of total FDI capital is focused on the processing and manufacturing industry. Poured mainly into high-tech industries sush as electronics, semiconductors, artificial intelligence, renewable energy. The development of those sectors directly impacts industrial property. Due to the increasing demand for factories to meet infrastructure and service requirements.

Vietnam is an attractive investment destination for capital flows

According to analysis by Savills experts, Vietnam is an attractive investment destination for foreign investors. Thanks to its stable political and economic situation and competitive labor costs. In that context, industrial real estate recorded outstanding growth. Attracting many international experts and engineers to work. Creating a key customer base for this market. They often choose to rent serviced apartments managed and operated by international units to meet many requirements on service quality and capital sources.

Currently, investors’ need to diversify supply chains also helps Vietnam become a destination of many considerations. Recently, Nvidia Corporation from the United States has committed to turning Vietnam into a new technology center with a deal worth 200 million USD. Or Hana Micron from Korea and Intel are projects with a scale of up to billions of USD. Along with that, developing green industrial zones. This is a mainstream trend not only taking place in Vietnam but also globally. Therefore, more and more investors are focusing on the circular economy.

Furthermore, Vietnam also aims to achieve net zero emissions by 2050. Therefore, the demand for green industrial real estate comes not only from sustainable development in the manufacturing industry but also from government requirements.

Occupancy rate in FDI projects

According to data from the Vietnam Association of Realtors (VARS), Vietnam currently has 418 industrial parks and export processing zones with a total area of ​​nearly 1.3 million hectares. Including 371 zones outside economic zones; 39 zones in coastal economic zones and 8 zones in border economic zones.

Industrial parks and economic zones have attracted more than 10,400 domestic investment projects. And over 11,200 FDI projects are still in effect with total registered capital of over 2.54 quadrillion VND and 231 billion USD.

FDI capital in industrial parks and economic zones accounts for about 35-40% of the total registered FDI capital increase of the whole country in recent years. On average, the occupancy rate of operating industrial parks is over 75%. 82% in the key northern provinces and 92% in the key southern provinces.

Stable investment environment attracts strong FDI capital

VARS representative said that thanks to the stable political environment and preferential tax policies, Vietnam is considered an attractive destination for foreign investors. There is also strong development of infrastructure; Especially transport and logistics infrastructure. They have helped connect industrial zones and domestic and foreign consumer markets.
Along with that is the opportunity to expand export markets. And attract investment when Vietnam participates in many free trade agreements. At the same time, the shift of global supply chains, especially from China, has significantly contributed to boosting the demand for Industrial Real Estate in Vietnam.

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