FDI capital into Vietnam is the highest since 2009

Big guy in industrial real estate

FDI capital continues to flow strongly, production activities have seen significant growth in the first 6 months of this year... are promoting the Vietnamese industrial real estate market. Domestic and foreign enterprises are not only expanding industrial land funds, but also investing synchronously in infrastructure, logistics and ready-built factories.

Mr. John Campbell - Director of Savills Industrial Services, Ho Chi Minh City - commented that the 32% increase in FDI inflows into the manufacturing sector in the first 6 months of 2025 compared to the same period last year is a significant step forward, not only for the manufacturing industry, but also for the entire economic growth trajectory of Vietnam. This is a breakthrough in both scale and structure, consolidating the roadmap towards high-value and sustainable industrial growth.

This increase is not accidental, but comes from a volatile global context. The value added of the manufacturing sector increased by more than 10% over the same period, contributing nearly 2.6 percentage points to GDP, proving that this is a structural shift, not a temporary boom.

According to Mr. Campbell, the sharp increase in the number of projects is clear evidence that Vietnam is not only a "beneficiary" of the production shift trend, but is also becoming a prioritized link in the global production network.

Industrial real estate is a "hot spot" attracting FDI capital flows.

Savills experts pointed out that there are many global factors that are simultaneously promoting the FDI wave into Vietnam. First, is the supply chain diversification strategy, often called “China + 1”. US-China trade tensions along with global tariff pressure make multinational corporations and businesses tend to seek politically stable and tax-incentive destinations like Vietnam.

Free trade agreements such as RCEP, CPTPP, EVFTA help Vietnam access about 65% of the global market, increasing its attractiveness for export-oriented manufacturing. In addition, its strategic location near China brings competitive labor costs and seamless connectivity to regional supply chains.

Green and high-tech FDI trends are also prominent, with projects such as Lego’s green factory or chip packaging investment, demonstrating the shift to a modern, environmentally friendly industrial model. The combination of these factors is opening a new era for high-value FDI flows, positioning Vietnam as a global manufacturing hub beyond its cost advantage.

In the industrial real estate market, a notable shift is the superiority of ready-built factories (RBF) over land purchases in terms of project numbers. Mr. Campbell assessed that this is a "turning point" in the picture of industrial real estate in Vietnam. RBF brings the advantage of quick start-up and reduced initial investment capital, with the highest absorption rate in 3 years, reaching 88 - 89% occupancy in the regions.

The increased demand for RBF has led to increased rental yields and occupancy rates, driving industry expansion. While industrial land supply remains large, building from scratch is more time-consuming and capital-intensive, making RBF an attractive option for flexible investors, especially in high-tech and ESG-compliant industries.

What does foreign capital need for industrial real estate?

From the market reality, Mr. Campbell shared, international investors today have more specific requirements for industrial real estate. They prioritize speed of operation, stable power source with renewable energy, dual power system, direct power purchase mechanism (DPPA). Sustainable development is a key factor, with the project achieving LEED/EDGE certification and green industrial park. Good connectivity near seaports and highways is also important, along with a clear legal environment such as transparent land valuation process. In addition, skilled human resources, especially in the field of electronics and semiconductors, are indispensable requirements.

To strongly develop industrial park real estate, Mr. Campbell recommended that it is necessary to expand connecting infrastructure, such as completing the target of 3,000 km of highways, upgrading seaports and inland container depots (ICDs) to help maintain investment attraction; encourage the development of ready-built factories (RBF/RBW) and build-to-suit (BTS) projects with higher standards.

Incentive policies should be adjusted to global minimum tax rates, while still remaining attractive. Finally, building a skilled workforce for the semiconductor and high-tech manufacturing industries will be key. These steps will not only help the industrial real estate market develop healthily, but also strengthen Vietnam’s position in the global supply chain.