Hanoi (VNA) - Foreign direct investment (FDI) is pouring into Vietnam at a rapid pace, reinforcing the country’s position as a rising hub on Asia’s industrial map. Amid supply chain shifts, ready-built factories are emerging as a strategic draw for international capital.
FDI momentum driven by manufacturing
Vietnam continued to shine as an attractive investment destination in the first seven months of 2025, with registered FDI reaching 24.09 billion USD, up 27.3% year on year. Disbursed capital stood at 13.6 billion USD, an increase of 8.4%.
Manufacturing remained the dominant sector, accounting for 56.5% of total FDI, or nearly 11.97 billion USD, in the first half of the year. Of 759 newly licensed manufacturing projects, up 40% from a year earlier, some 410, or 54%, opted to lease ready-built facilities rather than land, marking the first time factory leases outnumbered land deals in terms of project numbers.
The north retained its lead, attracting 54% of total capital and more than 380 projects, with Bac Ninh alone accounting for 13% of total FDI and 115 projects. The central region doubled its share to 6%, buoyed by lower costs and improved logistics, while the southern region remained a key player, with Dong Nai and Ho Chi Minh City gaining investors' attention.
Ready-built factories reshape industrial landscape
According to Cushman & Wakefield, Vietnam’s supply of ready-built factories reached about 11 million square metres by the second quarter of 2025, with an occupancy rate above 85%. Leading locations include Ho Chi Minh City (3 million sq.m), Dong Nai (2.2 million sq.m), Bac Ninh (1.6 million sq.m) and Hai Phong (2.2 million sq.m).
Analysts said the boom is driven by speed and flexibility. Leasing a ready-built facility can cut project timelines by months or even years compared with purchasing land, securing permits, designing and building from scratch. This accelerates deployment by as much as 12 to 18 times - critical in fast-moving global supply chains.
The model also reduces upfront costs. With monthly rents averaging 4–6 USD per sq.m in the northern region and 5–7 USD in the southern region, a 10,000 sq.m plant costs between 480,000 USD and 840,000 USD annually. By contrast, self-development can demand 3–6 million USD in land and construction costs, not including permits and support-item expenses. Leasing can therefore save 70–80% of initial investment.
Thanks to these advantages, ready-built factories have become a strategic choice for industries that need to bring products to market quickly, such as electronics, packaging and medical equipment, as well as projects with shorter life cycles of three to five years.
Regarding flexibility, businesses can easily scale production up or down without being tied to large fixed assets. This is particularly important for high-tech, electronics and assembly industries, which must adapt rapidly to market fluctuations.
Policy shifts and global trade pressures
A new US tariff regime on Asian exports took effect on August 1, setting duties at 20% - a significant cut from the draft level of 46%. The rate is seen as manageable, restoring investor confidence and reigniting capital flows that had slowed in the second quarter.
The “China 1” strategy, pursued for over a decade, has gained fresh momentum, with Vietnam a top choice thanks to competitive labour costs, proximity to China and key shipping routes, and stable policies.
Industrial property in Vietnam remains highly attractive given advantages in workforce, costs and strategic location, said Matthew Powell, Director of Savills Hanoi.
Despite trade tensions, Vietnam has held its place in global supply chains. Technical shortcomings are being addressed, with modern facilities offering pre-engineered steel structures, insulated roofing, corrosion protection, ceiling heights of 4–13 metres, automated line compatibility, and international-standard fire safety and lighting systems.
One example is KTG Industrial at VSIP Bac Ninh 2, built to ACI 117-10 standards for flatness and vibration resistance—crucial for high-tech industries. KTG Project Development Director Tran Quang Trung said the goal is to create workplaces that boost productivity while meeting stringent Environmental, Social and Governance (ESG) requirements.
Likewise, Trang Bui, General Director of Cushman & Wakefield Vietnam, noted that the shift goes beyond final assembly, as many firms are considering relocating entire supply chains to Vietnam. This is giving strong momentum to the premium ready-built factory segment, a strategic niche in the industrial property market.
Not only conventional manufacturers but also high-tech firms are turning to ready-built factories with strict technical and ESG standards. With new US tariffs accelerating global supply chain shifts, the model has emerged as a rising star in Vietnam’s industrial property, combining cost advantages, strategic location and flexibility to attract FDI and elevate the sector’s role in integration./.
