Foreign direct investment (FDI) into Vietnam hit US$26.1 billion in the first eight months, up more than 27% from a year earlier, according to the General Statistics Office.

Manufacturing dominated the inflows, attracting nearly US$12 billion, with many companies opting for ready-built factories to slash costs and shorten production timelines.

In HCM City, Avery Dennison Worldon Vietnam, a venture between US labeling giant Avery Dennison and China’s Shenzhou Group, inaugurated a US$4.7 million plant in June, its third in Vietnam.

Da Nang has also emerged as a magnet, signing agreements with Amata Vietnam, Green i-Park, GuogGuoguang Electric and European Plastic to explore projects in its free-trade zones.

GuogGuoguang Electric, a Chinese electronics supplier, is set to break ground on a component plant in Lien Chieu before year-end.

Dutch developer CTP is committing EUR1 billion (US$1.1 billion) to new industrial zones across Hung Yen, Gia Lai and other provinces, underscoring confidence in Vietnam’s role as a regional hub.

Race for ready-built space

The supply of ready-built factories has ballooned to 11 million square metres nationwide, with occupancy topping 85%, Cushman & Wakefield estimates.

Hubs such as HCM City, Dong Nai, Bac Ninh and Hai Phong are leading the charge.

Rents run US$4-6 per square metre in the North and US$5-7 in the South – attractive compared with building plants from scratch, which can cost US$3-6 million upfront.

“Speed and flexibility are decisive in global supply chains,” said Trang Bui, general director of Cushman & Wakefield Vietnam. “Ready-built factories allow firms to ramp up production immediately without being tied to long-term assets.”

Infrastructure momentum

The Government is pushing ahead with big-ticket infrastructure, including new bridges in Hanoi, the proposed Gia Binh International Airport in Bac Ninh, and a high-speed rail line linking Lao Cai, Hanoi, Hai Phong and Quang Ninh.

Administrative reforms are also cutting red tape. “These changes are making Vietnam a priority destination for global manufacturers and logistics groups,” said Michael Piro, CEO of Indochina Capital.

His firm’s joint venture, Indochina Kajima, has launched six Core5 ready-built factory projects across Quang Ninh, Hung Yen and Hai Phong in just three years.

The influx of foreign capital is driving up industrial land rents. CBRE reports average rates in Hanoi, Bac Ninh and Hung Yen rose nearly 4% year-on-year to US$139 per square metre.

In the South, Cushman & Wakefield pegged average rents at US$179.

Investors are also demanding greener, higher-standard facilities. Core5’s LEED- and ESG-certified projects in Quang Ninh and Hung Yen achieved near-full occupancy within months. Japanese investor Hulic has joined forces with Core5 to expand further.

Trade shifts

The wave comes as Vietnam cements its position in the “China+1” strategy.

A new US tariff regime on Asian exports that took effect in August imposed duties of 20% – lower than initially feared – boosting confidence in Vietnam as an alternative base.

Tech and consumer giants including Samsung, Intel, LG, Foxconn, Amkor, NVIDIA, Toyota, Unilever and Procter & Gamble are already entrenched in the country.

Contract manufacturers for Nike, Adidas and Puma have also scaled up operations, creating tens of thousands of jobs and deepening supporting industries from packaging to precision engineering.

“Vietnam is steadily consolidating its position as a global industrial hub,” said Matthew Powell, director at Savills Hanoi. “Strategic location, competitive costs and modern facilities are proving irresistible for foreign investors.”

Industrial property market heats up

Vietnam’s industrial real estate market is becoming hotter, driven by an increase in foreign direct investment (FDI) flows.