Vietnam’s industrial real estate market is entering a new phase of development with strong growth potential. Stable foreign direct investment (FDI) flows, high demand for industrial land, steadily increasing rental prices and the wave of global production shifts are the main drivers for the growth of businesses in this sector.
In particular, companies owning large land funds in strategic locations such as KBC, BCM, IDC and SIP are expected to bring attractive returns to investors in the medium and long term.
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| The industrial park real estate market is becoming a bright spot for investment in the context of many challenges in the residential real estate market. (Source: VnEconomy) |
Investment highlights amid many challenges
The industrial real estate market is becoming a bright spot for investment in the context of the challenging residential real estate market.
By 2024, high occupancy rates in industrial parks have become a notable indicator, with the Northern region reaching 81-83% and the Southern region reaching 92%. This not only shows strong demand for industrial space but also ensures stable cash flow for industrial park investors.
Industrial land rental prices also maintained an impressive upward trend, with an increase of 35% in the North and 67% in the South from 2020 to mid-2024. In particular, in the Southern industrial parks, rental prices increased by an average of 10-18% in 2024 alone, proving that market demand has not decreased, even when the rest of the real estate market is facing difficulties.
FDI inflows continue to be the main driving force behind the industry. In the first 9 months of 2024, total registered FDI capital reached over 24.78 billion USD, up 11.6% over the same period in 2023. Notably, registered FDI capital in the manufacturing sector in the first 7 months of 2024 increased sharply by 15.7% over the same period to 12.65 billion USD, reflecting continued high demand for industrial park land for factory construction.
Global production shift trends
The wave of production shifting from China to Vietnam is forecast to continue to accelerate in the coming years. After the US-China trade war and the Covid-19 pandemic, many large corporations have implemented a strategy to diversify their manufacturing locations, with Vietnam emerging as an attractive destination thanks to its favorable geographical location, abundant labor force and stable investment environment.
Industrial park real estate stocks reacted positively after the US presidential election results. In the session on November 6, 2024, many industrial park stocks increased sharply, such as KBC, SZC, SIP, VGC increased to the ceiling; LHG, TIP increased by over 5%; IDC increased by over 4.5%.
This reflects investors' expectations that businesses will continue to shift production from China to Vietnam to avoid tariff and supply chain risks.
Infrastructure Development
The government is accelerating the disbursement of public investment capital for key projects such as the North-South Expressway, Long Thanh Airport, and new industrial parks. In 2024, about VND422 trillion in investment capital, equivalent to 62.3% of the total public investment plan, is waiting to be disbursed for transport infrastructure projects. This large-scale investment creates a solid foundation for the development of the infrastructure construction industry and industrial parks.
Statistics show that since the beginning of the year, 23 projects have been put into operation and 19 key infrastructure projects have been started. Not only that, relevant parties are also speeding up the preparation for investment in important national railway lines, and plans for railway lines and infrastructure connections are continuously announced by localities to attract investment.
Market demand and supply
According to experts, 2025 will be the year when industrial real estate will really boom. From 2024 to 2027, Vietnam is expected to add 15,200 hectares of industrial land and 6 million square meters of warehouses to meet investor demand. This large-scale development creates a favorable environment for businesses operating in the field of industrial park infrastructure development.
Supply from factories and warehouses has grown significantly in the Southern region in the third quarter of 2024. Specifically, ready-built factories increased by 2% compared to the previous quarter (about 92,000 m2), ready-built warehouses increased by 3% (about 174,400 m2). The increase in supply combined with the increase in rents shows that business confidence in the long-term prospects of the market is being strengthened.
Stock selection criteria
When choosing stocks to develop industrial park infrastructure, investors need to carefully consider the following criteria:
According to expert Nguyen Anh Khoa, Head of Analysis & Research at Agribank Securities Company (AGR), the most important factor in valuing industrial park stocks is the land fund and expansion potential of the enterprise. The available land area for lease will strongly affect the long-term growth of the company, directly determining the future cash flow.
Occupancy rate and land rental price are important indicators reflecting the business performance and future profits of the enterprise. An industrial park with high occupancy rate and land rental price increasing steadily over the years is often a sign of a prime location and good infrastructure quality, thereby creating sustainable profits in the long term.
Financial factors such as cash flow, debt ratio and financial management capacity also need to be carefully evaluated. A business with a healthy financial structure, low debt ratio and the ability to generate stable cash flow will minimize risks in a volatile market context.
Industry Outlook and Forecast to 2030
The outlook for the industrial park real estate industry in the period 2025-2030 is assessed very positively. According to experts, 2025 will be the time when industrial real estate will really boom, when the wave of global production shift continues to take place strongly. Land rental demand gradually shifts to second-tier provinces and cities due to the scarcity of central areas, creating opportunities for businesses to expand land funds in new areas.
New generation FDI capital flows (high technology, semiconductors, green energy) from major partner countries such as the US, China, and the EU are forecast to increase significantly by 2030. This will promote the development of specialized industrial parks with higher standards, opening up new markets for businesses developing industrial park infrastructure.
However, the industry will also face some challenges in the long term. Competition from regional countries such as Indonesia, Thailand, and Malaysia is increasingly fierce in attracting FDI. Increasing requirements for the environment and sustainable development require industrial parks to invest more in waste treatment systems and renewable energy.
In addition, the rapid development of automation and robotics technology could reduce Vietnam's labor cost advantage, requiring industrial parks to continuously improve quality to maintain competitiveness.
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| The list of 31 listed industrial park infrastructure development companies will be detailed in the " Vietnam Industrial Real Estate Yearbook - Development planning to 2030". (Source: batdongsan.com.vn) |
Recommendations for individual investors
Vietnam’s industrial real estate market is entering a new phase of development with many positive prospects. Stable FDI capital flows, large demand for industrial land, increasing rental prices and the trend of global production shifting are strong supporting factors for the development of the industry.
For individual investors, this is the right time to consider investing in potential industrial park real estate stocks. KBC, IDC, BCM, SZC and SIP are assessed to have good growth prospects in the medium and long term. However, investors need to remember that investing in industrial park real estate stocks requires a long-term vision and patience, not suitable for short-term "surfing" strategies.
To optimize investment efficiency, investors should focus on businesses with large land funds, favorable locations, stable business results and clear development strategies. At the same time, it is necessary to closely monitor macroeconomic factors such as FDI attraction policies, foreign capital flows and infrastructure development progress to be able to adjust investment strategies in a timely manner.
With a vision to 2030, Vietnam's industrial real estate industry will continue to grow strongly, creating many profitable investment opportunities for investors with the right strategy and long-term vision.
The list of 31 listed industrial park infrastructure development companies will be detailed in the Vietnam Industrial Real Estate Yearbook - Development planning to 2030.
Source: https://baoquocte.vn/co-hoi-da-u-tu-va-o-co-phieu-phat-trie-n-ha-ta-ng-khu-cong-nghiep-viet-nam-giai-doan-2025-2030-308107.html
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