Global Giants - Samsung, LG, Foxconn, Hyosung Announce Expansion Plans in Vietnam

In 2024, Vietnam continues to witness robust investment waves from global conglomerates such as Samsung, LG, Foxconn, Hyosung, and Nestle. Their plans to expand and initiate projects in strategic regions like Bac Ninh, Bac Giang, Quang Ninh, and Hai Phong have contributed to a record-breaking disbursement of $25 billion in foreign direct investment (FDI). This development not only boosts the growth of Vietnam’s industrial real estate market but also reinforces the country’s position on the global manufacturing map.

Vietnam’s northern industrial real estate market recorded an average occupancy rate of 80%, while the southern region achieved a higher rate of 89%. In the north, absorbed area exceeded 400 hectares last year, primarily driven by large-scale transactions in industries such as electronics and electric vehicle manufacturing. In the south, the absorbed area reached 265 hectares, down 52% compared to 2023 due to limited industrial land availability in key zones, with major transactions concentrated in Ba Ria-Vung Tau and Long An.

Industrial land rental prices in Vietnam continued to grow, narrowing the gap between the two main industrial regions. By the end of 2024, the average rent in northern industrial parks reached $137 per square meter for the remaining lease term, up 4.2% year-over-year, while the south saw prices hit $175 per square meter, a 1.4% increase. Markets like Hai Duong and Hai Phong are becoming attractive destinations with competitive prices.

The central region has also seen positive shifts. Nghe An has attracted major investors like Luxshare ICT and Foxconn, transforming the industrial landscape in this province and neighboring areas like Thanh Hoa. With competitive rental prices ranging from $60 to $90 per square meter for the remaining lease term and an abundant labor force, the central region is poised to become a development hotspot in the coming years.

In the ready-built factory (RBF) segment, absorption rates reached their highest in three years. The northern region’s RBF projects saw an 88% occupancy rate, up 1.5 percentage points, while the southern region achieved 89%, up 7.7 percentage points. Both regions added approximately 0.5 million square meters of new supply, driving rental prices up by an average of 2%, reaching $4.9 per square meter per month in the north and $5.0 in the south.

The ready-built warehouse (RBW) segment also experienced robust growth, particularly in the south, where net absorption doubled compared to last year, reaching 0.4 million square meters. The north maintained a net absorption rate of approximately 0.2 million square meters, while rental prices increased by 5.3% in the south and 2.1% in the north, averaging $4.7 per square meter per month.

Rental demand was primarily driven by strategic industries such as furniture, household appliances, electronics, and companies in the e-commerce and logistics sectors. In the north, logistics, electronics, and material manufacturing sectors led the market, with major transactions coming from Chinese, Vietnamese, and European companies. Meanwhile, the south attracted a significant number of investors from Asia.

These figures and developments highlight Vietnam’s industrial real estate market as a bright investment spot, drawing interest from leading global corporations. With strong and sustainable growth, Vietnam is set to remain a priority destination for international investors in the years to come.

Source: Market Times