A new impetus for industrial real estate

According to the most recent statistics from the Statistics Office (Ministry of Finance), FDI capital flows continued to expand impressively, hitting USD 31.52 billion as of October 2025, up 15.6% from the same time last year. Industrial real estate accounted for 19.5% of all newly registered capital.

Drivers for FDI

These figures are the clearest and most compelling proof of international investors' long-term trust and appreciation for the Vietnamese market's potential. In fact, it stems from a number of global variables.

The first is a supply chain diversification approach (China plus one). Multinational corporations are aggressively pursuing a production diversification strategy to decrease risk dependency on a single market, such as China. Vietnam, with its good geographical position and affordable pricing, has emerged as an appropriate destination for this development plan.

Furthermore, the closeness to China enables Vietnamese enterprises to benefit from cheap labor costs while retaining smooth linkages to the East Asia supply chain for materials and components. This maintains the continuity and efficiency of industrial processes.

The second issue is tariff pressure and trade tensions. In 2025, substantial trade wars, particularly between the United States and China, as well as rising global tariff pressure, will compel corporations to seek alternate manufacturing sites with stable political conditions and advantageous tariffs. Vietnam has emerged as a strategic alternative.

Third, Vietnam's active implementation of FTAs such as RCEP, CPTPP, and EVFTA provides significant competitive advantages. These agreements provide tariff benefits for Vietnamese goods to access around 65% of the worldwide market, significantly improving the attractiveness of export-oriented industrial projects.

Finally, present financial flows are shifting not only toward assembly but also toward quality and sustainability. The rise of initiatives like Lego's green plant and investments in the semiconductor chip packaging sector demonstrate that Vietnam is transitioning to a more contemporary and environmentally friendly industrial model.

Industrial real estate transformation

One of the most evident turning points in the industrial real estate business is the significant shift away from traditional land leasing and toward ready-built factories.

Historically, multinational investors preferred to rent property, develop factories themselves, and even build their own housing for specialists. They are increasingly changing to renting more rather than doing it themselves, including hiring pre-built factories and warehouses, in order to decrease initial investment capital and expedite the time to get into business.

Customers used to have to rent separate factories and warehouses, but today they require a flexible mix of the two to directly fulfill their production and export goals. Furthermore, when export speeds increased, associated services such as temporary import for re-export and duty-free zones expanded rapidly.

This is evident in the first half of 2025, when ready-built buildings and warehouses saw the greatest absorption rate in three years, with occupancy ranging from 88 to 89 percent across areas. Increased demand has resulted in higher rental yields and occupancy rates, prompting developers to scale up their construction in the sector.

John Campbell, Director of Industrial Services at Savills Vietnam said, international investors would be increasingly imposing extensive conditions. First and foremost is the speed of commissioning, followed by a more robust and environmentally friendly energy infrastructure. Sustainable development is also becoming an obligatory requirement for industrial real estate projects, with international certifications like LEED/EDGE and ESG compliance.

Solutions to be done

To sustain its appealing position in the international arena, in John Campbell’s opinion, Vietnam's industrial real estate industry must simultaneously implement solutions ranging from infrastructure to human resources.

First, secure a more reliable and cleaner energy supply, with a focus on expanding the DPPA (Direct Power Purchase Agreement) system and developing renewable energy.

The allotted land fund must also be ready for development, while the project approval procedure must be expedited and land prices made public in order to promote investor certainty. The government must also continue to push the growth of vital connective infrastructure, such as fulfilling the 3,000-kilometer highway objective and renovating seaports simultaneously to optimize logistics.

Furthermore, flexible models such as ready-built factories and warehouses (RBF/RBW) and build-to-suit (BTS) projects with higher standards must be encouraged in order to fulfill the technology industry's stringent needs.

Furthermore, developing specialized human resources for key industries like as semiconductors and high-tech manufacturing is critical to serving high-value FDI projects in future.