Welcoming new FDI wave into factory projects

With a steady inflow of foreign direct investment (FDI), led by manufacturing, Vietnam has emerged as the center of Asia’s industrial map. Amid the wave of shifting supply chains, ready-built factories have become the “trump card” helping Vietnam accelerate its reception of international capital flows.

The ready-built factory segment is considered an acceleration solution in the supply chain race. Photo : Duc Thanh

FDI capital increases sharply, manufacturing leads the trend

In the picture of attracting foreign investment, Vietnam continues to be a "bright spot" when in the first 7 months of 2025, the total registered FDI capital reached 24.09 billion USD, an increase of 27.3% over the same period in 2024; realized capital reached 13.6 billion USD, an increase of 8.4% over the same period.

This is a continued positive signal for foreign investment in the Vietnamese market. In particular, manufacturing remains the leading sector, accounting for 56.5% of total FDI capital in the first 6 months of 2025, with nearly 11.97 billion USD, thanks to the wave of supply chain shifts and global restructuring. Of the 759 newly licensed manufacturing projects, up 40% over the same period last year, up to 410 projects (accounting for 54%) chose to rent factories instead of land. This is an important turning point when for the first time, factory transactions exceeded land transactions in terms of project number.

The North continues to lead, accounting for 54% of total capital and more than 380 FDI projects in the first half of 2025, with Bac Ninh being the focus with 13% of total capital and 115 projects. The Central region surprised by doubling its market share to 6%, thanks to low costs and improved logistics. The South remains important, with Dong Nai and Ba Ria - Vung Tau emerging as attractive destinations.

The ready-built factory segment is considered an acceleration solution in the supply chain race. According to Cushman & Wakefield, the supply of ready-built factories in Vietnam reached about 11 million square meters, with an occupancy rate of more than 85% by the second quarter of 2025. Leading localities include Ho Chi Minh City (3 million square meters), Dong Nai (2.2 million square meters), Bac Ninh (1.6 million square meters) and Hai Phong (2.2 million square meters).

According to this consultant, the boom in the ready-built factory market comes from a number of factors. First of all, the speed of market entry. Renting a ready-built factory helps businesses shorten the time by months, even years, compared to the process of buying land, applying for permits, designing and building. In addition, businesses renting factories can shorten the implementation time by 12 to 18 times, suitable for the context of the rapidly shifting global supply chain.

Thanks to the above two advantages, the pre-built factory model becomes a strategic choice for industries that need to bring products to market quickly, such as electronics, packaging, medical equipment, or projects with a short life cycle of 3-5 years.

The next factor is the flexibility to expand or contract production. Enterprises can easily adjust the scale of operations without being tied down by large fixed assets. This is especially important for high-tech, electronics and assembly industries, which must adapt quickly to market fluctuations.

In particular, this model helps reduce initial investment costs. Instead of spending tens of millions of dollars to buy land and build, businesses only need to pay periodic rental costs. This not only helps optimize cash flow, but also reduces financial risks during volatile market periods.

Specifically, businesses only need to pay rent periodically (monthly/quarterly) and some deposit fees. With an average price of about 4-6 USD/m2/month in the North and 5-7 USD/m2/month in the South (according to Cushman & Wakefield), the cost for a 10,000 m2 factory ranges from 480,000 to 840,000 USD/year.

Meanwhile, if a business buys land and builds on its own, it will incur many costs, including a one-time land lease payment for a period of 50 years (average 100-250 USD/m2 depending on location), and construction costs of 200-350 USD/m2. With a similar scale of 10,000 m2, the total initial cost can be up to 3-6 million USD, not including licensing, design and ancillary costs.

Therefore, pre-built factories help save 70-80% of initial investment costs, especially important for businesses that are expanding rapidly or testing the market.

Boost from global policy and trade

On August 1, 2025, the new US tax rate applied to Asian exports officially took effect, at 20% after being reduced from the original draft of 46%. This tax rate was assessed as “bearable”, restoring investor confidence, from which the capital flow that had stagnated in the second quarter has returned strongly.

The “China + 1” strategy, which has been taking shape for more than a decade, is now being accelerated and Vietnam has become a priority destination thanks to its competitive labor costs (lower than Thailand and Malaysia) and favorable geographical location (bordering China and close to shipping routes). In addition, Vietnam also has stable policies and commitments to infrastructure development.

According to Mr. Matthew Powell, Director of Savills Hanoi, the industrial real estate sector in Vietnam remains an attractive destination thanks to advantages in labor, cost and strategic location.

Despite concerns about trade barriers with the US, Vietnam is still maintaining its role in the global supply chain.

In particular, the technical limitations that used to be Vietnam's weaknesses are being overcome. The factories now have prefabricated steel structures, insulated, anti-corrosion roofs, ceiling heights from 4 to 13 m, meeting automatic production lines; floor loads from 1,000 to 4,000 kg/m2; fire prevention, electrical and lighting systems meeting TCVN and QCVN standards; lighting intensity from 100 to 750 lux, combined with natural ventilation and negative pressure exhaust fans.

A typical example is KTG Industrial at VSIP Bac Ninh 2 of KTG Vietnam Industrial Development Joint Stock Company, with a design that meets ACI 117-10 standards, meeting the requirements of flatness, vibration reduction, etc., which are considered key factors for the high-tech industry. “Our goal is to create a working environment that both improves productivity and protects the environment, meeting increasingly stringent ESG requirements,” said Mr. Tran Quang Trung, Project Development Director of KTG Industrial.

Similarly, according to Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam, the shifting trend no longer stops at the final assembly stage, but many businesses are calculating to move the entire supply chain to Vietnam. This creates a strong driving force for the high-end ready-built factory market, a strategic segment of industrial real estate.

Not only general manufacturing enterprises, even high-tech corporations are interested in this model, with strict requirements on technical standards, from floor load, ceiling height, to factors related to ESG.

The new US tariffs have become a catalyst for the restructuring of the global supply chain. In this context, ready-built factories have emerged as a “new star” of Vietnam’s industrial real estate. Thanks to cost advantages, strategic location and flexibility in implementation, this model not only helps Vietnam take advantage of FDI attraction opportunities, but also elevates industrial real estate in the integration process.

Source: https://baodautu.vn/don-song-fdi-moi-vao-du-an-nha-xuong-d378736.html