The industrial and digital sectors in Vietnam are experiencing robust development, supported by foreign direct investment (FDI) inflows, large-scale infrastructure projects, and favorable legal frameworks. The shift toward high-value-added production, coupled with enhanced logistics capabilities and expanded data centers, is elevating Vietnam's position in the global supply chain.
Booming Foreign Direct Investment (FDI)
Vietnam's industrial sector is undergoing a significant transformation, attracting a “new wave” of high-value investment, marking the country's development as a hub for manufacturing, logistics, and digital services in Southeast Asia.
In the first 10 months of 2024 alone, FDI inflows into Vietnam reached approximately $27 billion, with high-value sectors such as electronics, automotive components, semiconductors, and green technologies leading the charge.
Key investing nations include South Korea, Singapore, and Japan, underscoring a trend toward high-tech and high-value manufacturing. The manufacturing sector accounts for around 63% of total FDI, highlighting Vietnam’s appeal beyond traditional low-cost production.
The northern and southern key economic zones are the primary destinations for this capital influx. The northern region, including Bac Ninh and Hai Phong, stands out for its strategic location near China and North Asian markets, benefiting export-focused industries. In contrast, the southern region, including Ho Chi Minh City, Binh Duong, and Dong Nai, boasts a strong logistics network and convenient ports, ideal for both export and domestic manufacturing. Vietnam's free trade agreements (FTAs) with the EU, the UK, and others further enhance its attractiveness by providing broader market access and competitive trade advantages.
John Campbell, Director of Industrial Real Estate at Savills Vietnam, emphasized: "Strong FDI inflows, strategic location, competitive costs, e-commerce growth, open trade policies, and Vietnam's role in the global supply chain will be crucial for the long-term supply and performance of the warehouse segment."
Infrastructure Development: Strengthening Growth Foundations
To support this new wave of investment, Vietnam is ramping up infrastructure development, allocating 7% of its GDP to key projects such as the North-South Expressway, Long Thanh International Airport, and deep-water ports like Cai Mep in Ba Ria-Vung Tau, which will connect directly to Europe, the Americas, and Southeast Asia.
The northern economic zone benefits from strong infrastructure, including highways and major ports like Hai Phong and Lach Huyen, enhancing its appeal to export-oriented industries. Meanwhile, the extensive port system in the southern economic zone, particularly the deep-water port at Cai Mep, facilitates direct shipping to international markets, reinforcing Vietnam’s role as a key logistics hub.
This development is accompanied by increasing demand for modern warehouses and industrial facilities. With the growth of e-commerce and rising FDI, demand for ready-built industrial spaces is expected to surge.
In 2024, the supply of ready-built factories and warehouses is projected to increase by 31%, with occupancy rates exceeding 80% in key regions. The southern economic zone, with its logistics advantages, is particularly favored due to its competitive costs and strategic location, serving both domestic and international clients.
Warehouse costs in Vietnam remain attractive, with an average price of $5.6 per square meter, drawing companies adopting the "China +1" strategy. Developers are responding to strong demand with modern, high-tech facilities, including eco-friendly options that meet international standards.
Government support for logistics development, through investments in multimodal transport and dedicated logistics zones, further drives growth, positioning Vietnam as a preferred destination for cost-efficient and effective industrial solutions.
According to John Campbell, over 44% of new manufacturing FDI in the first 10 months of 2024 focused on high-value-added products like electronics and electrical equipment, highlighting Vietnam's shift up the value chain.
Data Centers: A Key Market
As the digital economy expands across Asia, Vietnam is becoming a critical market for data centers. Valued at $685 million in 2023, the data center market is projected to reach $1.4 billion by 2029, driven by growing demand for cloud computing, 5G, and IoT. The government's Digital Transformation Program aims for 50% of businesses to operate digitally by 2025, underscoring Vietnam's commitment to becoming a digital hub.
"Vietnam’s robust exports of manufactured goods play a vital role in its economic recovery this year. FDI inflows into high-value-added manufacturing sectors have significantly boosted the nation’s overall export growth, with electronics emerging as a major contributor," said the Director of Industrial Real Estate at Savills.
Regulatory changes encouraging foreign investment in data centers—allowing foreign ownership of local data centers—are further stimulating this sector. High internet penetration rates and Vietnam's booming e-commerce sector also drive demand, positioning data centers as a crucial pillar of the country's economic future.
In 2024, e-commerce revenue in Vietnam is expected to grow by 38%, led by online retail platforms. This growth will further increase demand for warehouses, logistics, and data storage, solidifying Vietnam's role as a rapidly growing digital economy in Southeast Asia.
Source: https://kinhtenongthon.vn/Bat-dong-san-cong-nghiep-thu-hut-lan-song-moi-ve-dau-tu-gia-tri-cao-post71307.html
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