From Tariff Tension to Dynamic Growth: Vietnam’s Industrial Real Estate Rebounds

FDI Proves Resilient After Global Tariff Pressures: Vietnam’s foreign direct investment, FDI, has demonstrated impressive resilience even after a period of global tariff disruptions that created uncertainty across supply chains. According to recent statements highlighted at the Vietnam Industrial Property Forum 2025, Vietnam recorded USD 28.54 billion in total registered FDI in the first nine months of 2025, marking a 15.2 percent year on year increase. Actual realised capital reached USD 18.8 billion, the highest level in five years.

The “tariff turbulence” earlier in the year did not lead to major project cancellations. Most multinational manufacturers kept their Vietnam expansion plans intact, reinforcing the country’s position as a stable investment destination amid shifting global trade dynamics.

Stronger Market Despite Trade Uncertainty

Experts note that Vietnam has effectively weathered 2025’s tariff related concerns. Early in the year, heightened geopolitical tensions raised questions about the reliability of cross border manufacturing operations. However, by late quarter three, sentiment had improved significantly.

At the forum, officials highlighted that Vietnam now ranks third in ASEAN in positive FDI performance this year, following Singapore and Indonesia, and continues to outperform regional markets in manufacturing attractiveness. Tariff policy uncertainty did not offset Vietnam’s long term fundamentals such as:

• Competitive workforce
• Strategic location
• Expanding trade network
• Improving infrastructure
• Consistent economic policy

Demand for Industrial Real Estate Accelerates

One of the strongest signals of confidence is the sustained demand for industrial land and ready built facilities. Industrial zones continue to report occupancy rates exceeding 90 percent, particularly in key manufacturing corridors.

Several notable trends are shaping this demand:

Rising Need for Ready Built, High Spec Facilities: Investors now seek modern, well designed industrial spaces capable of supporting advanced manufacturing, logistics, electronics assembly, and value added processing. This shift highlights Vietnam’s transition from primarily low cost assembly operations to higher technology production.

Increasing Interest from Diversified Investors: While Asia remains a major source of capital, more investors from Europe and North America are exploring new expansions in Vietnam, a trend reinforced by tariff driven supply chain realignments.

Supply Constraints in Prime Locations: High land utilisation in established industrial zones is creating pressure for new supply in emerging regions. This aligns with market observations showing that high quality infrastructure and logistics connectivity are becoming decisive factors for site selection.

Why Investors Are Still Choosing Vietnam

Policy Stability: Government commitment to maintaining a predictable investment environment remains a key asset. Vietnam’s policies supporting industrial upgrades, export growth, and energy transition help reassure long term investors.

Strategic Trade Positioning: Vietnam participates in major free trade agreements, giving manufacturers access to large global markets while mitigating tariff risks. This advantage became even more valuable during recent trade tensions.

Shift Toward Value Added Production: Investors increasingly view Vietnam not only as a base for production cost efficiency but as an evolving hub for technology intensive industries, such as electronics, semiconductors, pharmaceuticals, and cold chain logistics.

Challenges That Still Need Addressing

Vietnam must continue improving to sustain long term competitiveness:

• High logistics costs relative to regional peers
• Dependence on imported manufacturing inputs
• Need for stronger energy infrastructure
• Requirement for more resilient supply chain ecosystems

Addressing these structural issues will allow Vietnam to fully capture the benefits of shifting global production networks.

What This Means for the Future

With FDI inflows rising and investors reaffirming confidence, the outlook for industrial real estate remains highly positive. Modern factories, sustainability oriented developments, and integrated logistics hubs will be critical to supporting the next wave of high value investment.

Developers who prioritize global standard design, resilient infrastructure, reliable power systems, and tenant-focused solutions, will be best positioned to serve the new generation of manufacturers choosing Vietnam.

For investors seeking to capture opportunities, Core5 Vietnam provides more than facilities , we are your strategic partner in long-term success.

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