Industrial Real Estate Sector Leads First Place for FDI Inflows Over Other Property Sectors in Vietnam

Vietnam’s industrial real estate is attracting record levels of foreign direct investment (FDI), while residential and office markets remain cautious. Explore why global investors are prioritizing warehouses, factories, and industrial zones as the safest, most future-ready property sector in Vietnam.

Vietnam’s FDI Landscape in 2025: The Numbers Tell the Story

In the first eight months of 2025, Vietnam recorded USD 26.1 billion in registered FDI, up 27% year-on-year. Notably, industrial real estate and manufacturing captured the lion’s share: around 37% of inflows (USD 1.7 billion) were directed into this sector, while residential and office real estate saw far less activity.

This divergence reflects a structural shift in foreign investor preferences. As global supply chains reconfigure and demand for logistics space rises, industrial property offers long-term stability that speculative residential and office projects currently lack.

Why Investors Favor Industrial Real Estate

1. Resilience to Market Volatility

Residential property in Vietnam has faced tighter credit conditions and regulatory adjustments, while the office market contends with oversupply in major cities like Ho Chi Minh City and Hanoi. By contrast, industrial real estate demand is underpinned by real economic drivers: export growth, manufacturing relocation, and e-commerce expansion.

2. Alignment with Global Supply Chains

Vietnam is now a top destination for companies diversifying production away from China. This requires ready-built factories, warehouses, and modern logistics hubs — assets that directly support global manufacturers and distributors.

3. Policy Support and Incentives

The government prioritizes industrial development through land allocation, infrastructure investment, and tax incentives in economic zones. This pro-industry stance ensures that FDI in the sector enjoys fewer bottlenecks compared to residential property, which faces stricter regulations on land use and project approval.

4. ESG and Sustainability Appeal

Global investors are increasingly bound by environmental, social, and governance (ESG) requirements. Industrial parks and warehouses designed to LEED standards or powered by renewable energy align with these priorities, making them more attractive than traditional residential projects.

The Expanding Investor Base: From Asia to Europe

Historically, Japanese, Korean, and Chinese firms have led investment in Vietnam. But 2025 is showing a new trend: European capital is entering the market at scale. The announcement of a Dutch developer planning a €1 billion investment in industrial property highlights that Vietnam’s attractiveness is no longer limited to regional players.

This diversification of investors signals greater confidence in Vietnam’s regulatory environment and its role as a global production hub. It also underscores the fact that industrial real estate is increasingly seen as a safe haven asset in an otherwise uncertain global property landscape.

Global Comparisons: Vietnam vs. Regional Competitors

Vietnam’s surge is part of a wider regional trend, but its trajectory is unique:

• China: Still dominant in global manufacturing but facing higher costs and geopolitical risks.
• Thailand & Malaysia: Strong industrial infrastructure but slower FDI growth.
• Indonesia: Large labor force but regulatory complexity remains a barrier.

Vietnam’s advantage lies in its competitive labor costs, dense logistics networks, and a robust pipeline of industrial parks. These factors give it an edge in attracting capital that might otherwise go to its regional peers.

Implications for Vietnam’s Real Estate Market

The dominance of industrial real estate in FDI inflows has ripple effects across the broader property market:

• Housing Demand: As factories and logistics hubs expand, demand for worker housing and supporting amenities will grow in surrounding areas.
• Office Demand from Supporting Industries: While central business districts face oversupply, demand may shift to office spaces located closer to industrial corridors.
• Infrastructure Upgrades: Roads, ports, and utilities developed to serve industrial zones will also benefit local communities and other property sectors.

Key Takeaway

Industrial real estate has firmly established itself as Vietnam’s top-performing property sector for FDI inflows in 2025. Unlike residential and office property, which remain constrained by domestic challenges, industrial zones and logistics facilities are directly tied to the country’s global trade role.

By offering resilience, scalability, and ESG alignment, the sector is attracting not only traditional Asian investors but also new entrants from Europe and beyond. This marks a structural shift in Vietnam’s real estate market — one where industrial property is no longer just another asset class, but the anchor of Vietnam’s long-term economic strategy.

For investors seeking to capture opportunities, Core5 Vietnam is not just a developer — we are your strategic partner in long-term success.

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