Statistics compiled by the Foreign Investment Agency reveal that Vietnam’s FDI inflows reached US$13.43 billion by the end of July, with the real estate sector attracting US$1.53 billion, ranking third among industries.
Despite challenges faced by the real estate market, the demand for industrial land for lease remains high. Old industrial parks are experiencing a high occupancy rate, and the supply of industrial land is limited. Post-pandemic reopening has seen international financiers conducting surveys, signing MOUs, and leasing land at industrial parks.
Vietnam has become a new production hub in electronics, technology, and high-value industries, as demonstrated by the visit of a 52-firm delegation from the United States, including big names like Boeing, Coca-Cola, Meta, SpaceX, Netflix, and Apple. The country’s advantages in labor, population, infrastructure development, incentives for foreign investors, and efforts to maintain macroeconomic stability contribute to the high demand for Vietnamese industrial real estate.
Tyler Nguyen, head of Institutional Banking at Maybank Investment Bank, predicts bright prospects for FDI inflows into Vietnam in the second half of the year and beyond. President Yoon Suk Yeol’s recent visit to Vietnam was accompanied by more than 200 Korean investors, many of whom are keen to increase their investment in the country. For instance, LG Group plans to invest an additional US$1 billion in Hai Phong.
Other multinational companies are also making significant investments in Vietnam, such as Japan’s Sumitomo Group and Foxconn Singapore Pte Ltd. The trend of diversifying the global supply chain, stable exchange rates, and attractive corporate tax rates further contribute to the growth of the Vietnamese industrial real estate market.
The northern province of Hung Yen has offered 238 hectares of industrial parks for lease, and the available industrial land with reasonable rental rates attracts investment. However, the supply source of industrial land remains limited in provinces like Binh Duong, Dong Nai, Bac Giang, and Hai Duong, where the occupancy rate is consistently high.
To address this, Hai Duong has been approved to invest in six new industrial parks, aiming to provide a stable supply source of industrial real estate and attract more foreign investment. Northern provinces have also developed master plans and development orientations to welcome foreign investors, which is expected to increase the supply of industrial park land significantly in the coming years, reaching nearly 5,000 hectares from 2023 to 2026, according to Cushman & Wakefield Company’s report.