Vietnam’s Industrial Real Estate Boom: A New Global Production Base
By Tuong Thuy
Fri, February 24, 2023 | 9:13 am GMT+7
In the face of a challenging global economic climate, industrial real estate developers in Vietnam are optimistic about the country’s emerging status as a global manufacturing hub. This positive outlook is largely attributed to Vietnam’s strategic location, which offers proximity to China, the world’s largest manufacturing base. According to Bruno Jaspaert, CEO of DEEP C Industrial Zones, Vietnam stands to gain significantly from multinational corporations diversifying their supply chains and shifting production away from China.
Shifting Production to Vietnam
One notable example of this shift is American tech giant Apple, which is planning to move part of its MacBook production to Vietnam. Its supplier, Foxconn, is set to begin making MacBooks in Vietnam for the first time this coming May. This transition exemplifies the broader trend of supply chain diversification being adopted by multinational companies, seeking to mitigate risks and enhance operational resilience.
DEEP C Industrial Zones, a Belgian developer operating in Hai Phong City and Quang Ninh province, has been at the forefront of this industrial shift. The Quang Ninh province’s strategic location, bordering China, makes it an attractive destination for foreign investors.
Major Investments in Industrial Projects
In mid-February 2023, Vietnam granted an investment certificate to a significant project backed by Boltun Corp., a leading global supplier of auto fasteners and metal parts. The $165 million project, called Boltun Vietnam, aims to manufacture components for American and European electric vehicle manufacturers. This facility will be constructed in the Bac Tien Phong Industrial Zone and will occupy a substantial 35.3 hectares, with plans for production capacity to reach 60,000 tons annually.
The new factory will enhance Boltun’s global supply chain network, as the company currently operates multiple factories in Taiwan, China, and Germany. The decision to invest in Vietnam underscores a broader strategy to expand in Southeast Asia, ensuring long-term growth amid evolving market dynamics.
Rising Demand for Industrial Real Estate
The conference held by property services firm JLL Vietnam highlighted how such expansions are propelling industrial real estate development across the country. Jaspaert pointed out that DEEP C currently has approximately 1,840 hectares of industrial land available for lease, with plans to expand that to 2,000 hectares. This increase is in direct response to the rising demand as companies seek to relocate production facilities to Vietnam.
Jaspaert emphasized the potential economic impact, suggesting that if merely 2% of production from China’s Guangdong province relocates to Vietnam, it could significantly boost the Southeast Asian economy.
Foreign Investment and Infrastructure Projects
Another significant player in this industrial boom is Australia’s Logos Vietnam, which is witnessing exciting opportunities as companies globalize their supply chains. According to Logos Vietnam CEO Glenn Hughes, the company is committed to enhancing its logistics capabilities in Vietnam, having established an ambitious development pipeline targeting the Greater Ho Chi Minh City and Hanoi areas.
Since its entry into the Vietnamese market in 2020 with $350 million in funding, Logos aims to create over 600,000 square meters of logistics infrastructure by 2023, thereby meeting the increasing demands driven by e-commerce and broader supply chain diversification.
Continued Collaboration and Future Prospects
On February 10, the Singaporean conglomerate Sembcorp Industries announced a collaboration with their long-time Vietnamese partner, Becamex, to develop five new Vietnam Singapore Industrial Parks (VSIPs). This collaboration is expected to bring approximately $1 billion in investments to Vietnam. Since the inaugural VSIP park was launched in 1996, this joint venture has seen the establishment of 12 parks, attracting about $18.4 billion in investments from over 800 multinational corporations.
As Vietnam continues to solidify its position as a leading destination for manufacturing and industrial investment, the landscape of industrial real estate is evolving rapidly, with significant implications for the broader Southeast Asian economy. The ongoing transitions and largest industrial developments signal a future marked by creativity, resilience, and growth in response to global supply chain dynamics.
Visualizing the Transformation
Logistics Development in Progress
