New Wave of Investment into Vietnam: Numerous Sectors Attracting Foreign Capital

Vietnam is witnessing a surge of foreign investment in sectors such as electronics, automotive components, semiconductors, and green technology. These industries are attracting significant interest from investors in South Korea, Singapore, and Japan. According to John Campbell, Director and Head of Industrial Real Estate at Savills Vietnam, “Strong FDI inflows, Vietnam’s strategic location, competitive costs, the growth of e-commerce, open trade policies, and the country’s role in the global supply chain are key factors driving long-term supply and performance in the warehousing sector.”

Experts at Savills Vietnam highlight that the country’s economy is projected to grow by 6.1% in 2024, with inflation expected to reach 4.5%. Foreign direct investment has increased by 7% compared to the previous year, supporting industrial real estate while international tourism and retail sectors show promising signs of recovery.

During the first nine months of the year, the most prominent sectors attracting investment included electronics, automotive components, semiconductors, and green technology. Major investor nations like South Korea, Singapore, and Japan are leading the shift toward high-tech and high-value manufacturing. With manufacturing accounting for approximately 63% of FDI, Vietnam’s appeal now extends far beyond traditional low-cost production.

To sustain this wave of investment, Vietnam is accelerating infrastructure development, focusing on key projects such as the North-South Expressway, Long Thanh International Airport, and the Cai Mep deep-water port in Ba Ria-Vung Tau. These initiatives are set to establish direct connectivity with Europe, the Americas, and Southeast Asia, benefiting key economic zones in the northern region through integrated infrastructure.

In addition to transportation infrastructure, Vietnam is enhancing digital connectivity by expanding its 5G network and developing data centers, both of which support the growth of e-commerce and logistics.

In the real estate sector, the Vietnam Association of Realtors notes that while the market faces challenges, it also presents substantial opportunities. These dynamics reflect the impact of global economic fluctuations and domestic regulatory policies. Industrial real estate stands out as a key growth area amidst rising FDI inflows, while residential real estate continues to attract global investors.

Prominent international corporations, including Kusto Home (Singapore), Gamuda Land (Malaysia), CapitaLand (Singapore), Keppel Land (Singapore), Tokyu Corporation (Japan), Lotte Land (South Korea), and Central Trading & Development (Taiwan, China), have already invested billions of dollars into residential, urban, and industrial projects in Vietnam.

Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam, forecasts substantial foreign capital inflows into Vietnam’s real estate market through 2026. The genuine residential segment currently offers an attractive return rate of 8–10% per annum, significantly higher than the 2–3% seen in other regional markets.

The revised Housing Law of 2024, which extends home ownership terms for foreigners to 50 years, is expected to further energize the market, particularly in the premium segment. Vietnam’s real estate market is projected to attract billions more from foreign buyers, with customers from Singapore, Hong Kong, and Taiwan expressing optimism about the market’s growth prospects.

“In the short term, Vietnam’s real estate market is expected to remain stable, with robust development in the industrial and residential segments, particularly in highly urbanized areas,” Ms. Trang concluded.

Source: Lao Dong Newspaper