Industrial real estate 2025: Pre-built factories dominate the market.
With the rapid expansion of industrial parks, the strong development of infrastructure, and attractive investment incentives, industrial real estate is becoming an important channel for attracting foreign direct investment (FDI) and boosting domestic production.
Factory buildings in industrial zones are dominant.
Data from real estate consultants shows that from the second half of 2023 to the present, the demand for factory space has increased sharply thanks to the recovery of the industrial manufacturing sector and the trend of large businesses relocating to Vietnam.
According to CBRE Vietnam, in Q3 2024, the occupancy rate of ready-built factories reached 84%, a 3% increase compared to the previous quarter, while the average occupancy rate of warehouses reached 68%, a 7% increase compared to the previous quarter.
Overall, in the first nine months of 2024, the Southern market for primary warehouse space leased nearly 420,000 m2 of warehouse and over 540,000 m2 of factory space, almost double the amount leased during the same period last year. Ho Chi Minh City and surrounding areas such as Binh Duong, Dong Nai, Ba Ria - Vung Tau, Long An , Tay Ninh, etc., are the provinces and cities with the most vibrant and growing markets in the South.
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| Pre-built factory buildings in industrial parks are a preferred choice for investors. Photo: Le Minh Xuan 3 Industrial Park (Binh Chanh) |
Meanwhile, in industrial zones in the northern region, the average asking rent for ready-built factory space reached US$5/m2/month over the past three quarters, an increase of 0.6% quarter-on-quarter and 3.4% year-on-year.
Diverse quality sources
To meet the growing demand for factory space, industrial parks are actively developing projects to increase the supply of quality facilities.
According to estimates by Cushman & Wakefield, Vietnam is expected to have approximately 6 million square meters of warehouse and factory space in operation by 2027. The majority of this factory space is concentrated in key economic zones, which have significant potential to attract high-quality FDI.
However, industrial real estate has seen uneven growth. Factories within industrial parks have experienced significantly faster growth compared to those outside. According to market research firms, the majority of small, scattered factories outside industrial parks lack legal compliance, fire safety standards, are built on land with incorrect functions or sizes, and lack infrastructure and amenities, making them unattractive to investors.
Conversely, factory space for rent in industrial parks is becoming increasingly attractive due to its many advantages, such as compliance with planning regulations, legal and environmental requirements, land use standards, fire safety systems, security systems, and the provision of complete industrial infrastructure.
According to Saigon Investment Corporation (VRG), the investor of Phuoc Dong Industrial Park ( Tay Ninh ), ready-built factory spaces within the industrial park are preferred by investors due to their diverse sizes, quick start-up times, and cost savings. Furthermore, investors benefit from favorable policies offered by the industrial park and the local authorities.
According to representatives of Phuoc Dong Industrial Park, previously most businesses leased land to build and develop their projects themselves. However, recently, investors have shown more interest in ready-built factory spaces. In 2024, more than 50,000 m2 of ready-built warehouse space in the industrial park was absorbed. Therefore, in its upcoming planning and development strategy, Phuoc Dong Industrial Park will prioritize the construction of a modern, diverse system of ready-built warehouses to meet the needs of investors.
By 2025, Phuoc Dong Industrial Park is expected to supply the market with approximately 30,000 m2 of ready-built warehouses and factories. These factories are designed to suit various industries, with diverse sizes ranging from 3,000 to 7,000 m2.
According to the Phuoc Dong Industrial Park Management Board, the factory, upon handover to the investor, ensured compliance with legal requirements, fire safety regulations, environmental standards, and was fully equipped with infrastructure, ready for immediate production.
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| Factory buildings in Phuoc Dong Industrial Park are equipped with fire protection systems, two-story offices, and industrial infrastructure. Photo: Phuoc Dong Industrial Park. |
Furthermore, to enhance its competitive advantage and attract new capital flows into Vietnam, Phuoc Dong Industrial Park has implemented a strategy of innovation and product diversification.
Besides industrial land and ready-built warehouses, Phuoc Dong Industrial Park also provides factory construction services tailored to customer requirements. This is also a popular choice for many investors in Phuoc Dong Industrial Park due to its ability to meet specific structural criteria, its fast construction time, and its suitability as a financial solution for each business.
With positive signs, experts predict that the industrial real estate market will continue to develop in 2025. Investor confidence is increasing, product supply is diversifying, infrastructure is improving, and preferential policies will play a key role in attracting FDI and promoting economic growth in the coming period.
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