BEATING THE “TARIFF STORM”, INDUSTRIAL REAL ESTATE SEES FRESH CAPITAL INFLOW

17:45 01/10/2025 - DepBenVung

BEATING THE “TARIFF STORM”, INDUSTRIAL REAL ESTATE SEES FRESH CAPITAL INFLOW

[BOND MAGAZINE] BEATING THE “TARIFF STORM”, INDUSTRIAL REAL ESTATE SEES FRESH CAPITAL INFLOW

The industrial real estate market is considered one of the brightest and most promising segments, as FDI continues to select Vietnam as a key destination.

FDI Remains Strong in Vietnam

Despite global trade uncertainties and tariff fluctuations, foreign direct investment (FDI) continues to flow into Vietnam - reinforcing the country’s position as an attractive investment hub for international investors.

According to data from the General Statistics Office (Ministry of Finance):
First 7 months of 2025

The highest figure for the first seven months in the past five years.
This demonstrates that investment commitments are quickly being transformed into real business and production activities, creating jobs and contributing to economic growth.

Vietnam’s manufacturing sector is recovering after disruptions caused by U.S. tariff news.

July PMI (Purchasing Managers’ Index) for Vietnam’s manufacturing sector:

>> Reached 52.4 points
>> Up from 48.9 points in June
>> Above the 50-point threshold for the first time in four months

Alongside this, the return of new order growth came at the fastest pace since November last year, indicating an improvement in overall manufacturing health.

Investors and funds are continuing to allocate capital to Vietnam.

Although 30% of Vietnam’s export value is directed to the U.S., underlying demand remains strong as companies restructure supply chains across Asia. The remaining 70% of Vietnam’s exports continues to serve other promising markets.

FDI is shifting across sectors - from assembly and semi-finished component manufacturing towards higher value-added industries and finished products such as chip manufacturing, advanced materials, renewable energy (battery production, photovoltaic cells, silicon wafers), component manufacturing, and electronic products.

In addition, JLL notes signs of investment shifts from Europe, though Asian countries such as Japan, South Korea, and China remain the main growth drivers.

Experts emphasize that large capital inflows continue to pour into Vietnam. Major FDI investors in technology — including Samsung, Amkor, and Qualcomm — remain committed to long-term investment.

Particularly, following the announcement from U.S. President Trump:

+ 20% tariff on certain Vietnamese exports to the U.S.
+ 40% tariff on transshipped goods

According to forecasts by Cushman & Wakefield, from 2025 to 2028, the Southern Vietnam industrial land market is expected to welcome around 7,000 hectares of new land. Mergers in neighboring provinces around Ho Chi Minh City, such as Long An and Tay Ninh, will expand development space and enhance connectivity between industrial parks and regional infrastructure. This expansion will not only increase the supply of industrial land but also create significant opportunities for investors.

High-Quality Factories on the Rise — Driving Sustainability and Green Development

According to JLL’s survey of foreign investors:

87% of real estate occupiers surveyed across the Asia–Pacific region are targeting a 100% green-certified portfolio by 2030

Up from just 4% of certified portfolios today.

This trend is particularly evident in India, Malaysia, and Thailand, where over 95% of occupiers aim for:

a fully green-certified portfolio.

According to JLL, an increasing number of companies are also adopting sustainability strategies such as energy audits, sustainable interior fit-outs, and green lease agreements to achieve more sustainable workplaces.

For KCN Vietnam, meeting stringent sustainability standards such as LEED certification requires addressing green building requirements throughout the entire project lifecycle. This includes: Optimizing energy performance through smart energy management systems, prioritizing the use of renewable energy, and adopting sustainable materials, including heat-resistant solutions that adapt well to Vietnam’s tropical climate.

From the perspective of an industrial real estate developer, Mr. Hardy Diec noted that to sustain the wave of foreign investment into Vietnam, developers cannot stop at simply providing warehouses and factories. Instead, they need to create a comprehensive ecosystem where businesses can establish and expand operations conveniently, safely, and efficiently.

KCN Nhon Trach 6D in Dong Nai has invested in constructing high-quality and sustainable ready-built factories, using premium COLORBOND® steel with AM-ACTIVATE™ technology.

However, many enterprises remain concerned about higher initial investment costs compared to traditional industrial parks. Ms. Le Phuong Anh, emphasized that investors should conduct careful assessments and implement suitable solutions from the very beginning of each project.

This type of development can reduce energy consumption by up to 35%, while also supporting projects in meeting energy-efficient building standards, attracting premium tenants, and delivering greater long-term value for investors.

Source: Vietnam Investment Review (VIR)

2021-10-06

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