Real estate segments benefit from surging FDI inflow in production

The latest data from the General Statistics Office (GSO) revealed that total registered FDI in Vietnam reached US$24.78 billion as of late September, marking an annual increase of 11.6%. The southern region has been a magnet for FDI, particularly cities and provinces with robust infrastructure, a stable workforce supply, and proactive investment promotion, such as Ho Chi Minh City, Ba Ria-Vung Tau, Binh Duong, Dong Nai, and Ninh Thuan provinces.

Economists attributed this trend to companies seeking to diversify their supply chains or relocate production lines from China, where labour and production costs have become less competitive. Vietnam's strategic location in the heart of Southeast Asia makes it an attractive alternative.

Experts from Savills Vietnam said this shift brings substantial investment capital, enhances production capacity, creates quality jobs, and develops supporting industries. Consequently, Vietnam is evolving from a low-cost investment destination into a hi-tech manufacturing hub with greater value-added production.

The surge in FDI within the manufacturing sector is having a ripple effect on various real estate segments, including offices, serviced apartments and industrial properties, as demand continues to grow.

Alex Crane, Executive Director of Knight Frank Vietnam, noted that the continued development and leasing of ready-built factories is a positive sign.“This provides tenants with more options as they consider Vietnam a suitable destination for investment or business expansion”, he said.