Vietnam holds many advantages to attract investment in industrial real estate.

A newly published report by Savills states that Vietnam's industrial real estate market is witnessing strong developments.

The stable exchange rate between VND and USD compared to other countries in the region, along with corporate income tax (CIT) incentives, is creating favorable conditions for Vietnam over competitors such as Malaysia and Indonesia. The Vietnamese government is constantly introducing new CIT incentive policies to maintain this advantage.

Vietnam is located in a favorable position for production development activities.

According to the General Statistics Office, in 2023, Vietnam recorded an impressive GDP growth rate of approximately 5.1%, higher than the growth rates of 2.87% and 2.55% in 2020 and 2021, the second highest in the region, equivalent to Indonesia, and only behind the Philippines.

According to data from the Asian Development Bank in 2024, Vietnam's workforce has an average age of more than 32, showing potential for future growth.

At the same time, the wages that manufacturing workers in Vietnam receive are lower than in most other countries in the Southeast Asian region, except Indonesia. This is beneficial for Vietnam in attracting foreign investors, especially those businesses looking for low-cost production locations to optimize profits.

Vietnam holds many advantages in attracting investment in industrial real estate.

However, Savills said that Vietnam has shifted its focus from low value-added industries to attracting high value-added manufacturing industries, thereby strengthening its position as an emerging market in the region.

Vietnam is continuously demonstrating its competitiveness through its shift from an agricultural economy to an export-oriented one, especially in electronics and manufacturing.

Free trade agreements (FTAs) play an important role in attracting FDI into Vietnam.

Since joining the World Trade Organization (WTO) in 1995, Vietnam has signed and implemented a series of trade agreements, of which the Vietnam - EU Free Trade Agreement (EVFTA) in 2019 has created a boom in foreign investment.

According to a report from the Ministry of Planning and Investment, the total foreign direct investment (FDI) registered in Vietnam in recent years shows that the manufacturing and processing industry accounts for more than 70% of total FDI, reflecting investors' priority in this sector.

Mr. Thomas Rooney - Senior Manager, Industrial Real Estate Department, Savills Hanoi shared at the event Industrial Development Context of Hanoi and Northern Region.

Mr. Thomas Rooney - Senior Manager, Industrial Real Estate Department, Savills Hanoi, assessed "The concentration of FDI in the manufacturing and processing sector not only brings direct economic benefits but also creates a spillover effect, promoting the development of supporting industries and related services".

The expert said that large technology corporations such as Samsung, LG, Intel, and Foxconn have played an important role in making Vietnam a regional electronics manufacturing hub.

Recently, Foxconn’s total investment in Vietnam has been raised to 1.5 billion USD with a factory project in Bac Giang serving the assembly and processing of phone components. This also shows the trend of investing in high value-added industries in the Northern region, while Vietnam is in a favorable position for production development activities.

"Vietnam's geographical location in the heart of the Asia-Pacific region makes it an ideal destination for import and export activities.

The shift of production from China to Vietnam is also increasing significantly, not only from Chinese businesses but also from American and European businesses that have long been present in China and are looking to diversify or completely withdraw from China," Mr. Thomas Rooney analyzed.

The North is a bright spot in the industrial real estate market.

In the Northern region, with key provinces such as Bac Ninh, Hai Phong, and Thai Nguyen, it is becoming the leading destination for FDI projects in the manufacturing sector.

Bac Ninh, with its proximity to Hanoi and developed infrastructure, has attracted many large-scale projects from multinational corporations.

In the South, Binh Duong has also emerged as an important industrial center, with the participation of many FDI enterprises in the manufacturing and processing sector.

However, the North is still superior in terms of quantity and scale of new projects thanks to advantages in cost and complete transport infrastructure...

Industrial land prices in the North are a big advantage, with an average of about 138 USD/m2, 20% lower than in the South.

Specifically, currently in the South, to rent strategic locations in tier 1 areas, such as Binh Duong or Ho Chi Minh City, land prices can be up to 300 USD/m2.

Meanwhile, the northern market only has an average price of 180 USD/m2 for tier 1 areas such as Bac Ninh.

The North is a bright spot in the industrial real estate market.

Infrastructure in the North is considered to be well developed, with 10 completed highways and 4 other projects under construction. Meanwhile, the South has about 7 highways.

At the recent event "Industrial Development Context of Hanoi and Northern Region" in Hanoi, Ms. Pham Thi Thu Trang - Senior Manager, Industrial Business Development Department at Core5 - Indochina Kajima shared that in Vietnam, road transport is still the main mode of transportation, so the ability to move conveniently from production areas to consumer markets helps businesses optimize logistics costs.

In particular, the highways connecting the industrial park with Hanoi and the Chinese border further increase the attractiveness of the North to foreign investors.

Compared to the South, the North has more economic zones according to the Government's planning, notably the new coastal economic zone in Hai Phong with a scale of more than 20,000 hectares.

The North also attracts investment thanks to its competitiveness in labor resources, as the average salary in the South is currently the highest in the country, recorded at 9.3 million VND.

Ms. Pham Thi Thu Trang - Senior Manager, Industrial Business Development Department at Core5 - Indochina Kajima.

Although Vietnam's industrial real estate market has great potential, one of the main challenges remains the shortage of highly skilled labor.

This is especially important as Vietnam moves towards increasing value-added in manufacturing, Mr. Thomas said.

"Although the labor force is abundant, especially in the North, the majority of workers are still low-skilled. To overcome this problem, reforming education and training to improve labor skills is necessary," the expert said.

Besides, Mr. Thomas emphasized that infrastructure development is also an important factor to improve Vietnam's competitiveness.

Currently, infrastructure projects being implemented are mainly concentrated in a few areas, but there is a need for expansion and synchronous development nationwide.

In particular, improving the transportation network connecting industrial parks and consumer markets will help optimize logistics costs, creating favorable conditions for businesses.

Strong infrastructure will not only support the movement and transportation of goods but also enhance the ability to attract foreign investment to Vietnam.

Source: https://www.nguoiduatin.vn/savills-viet-nam-nam-giu-nhieu-loi-the-thu-hut-dau-tu-vao-bds-cong-nghiep-204240827171046065.htm