Vietnam lures new wave of high-value investments

Leading FDI areas include high-value industries such as electronics, automotive components, semiconductors, and green technology.

“Vietnam has evolved from traditional manufacturing, where companies were primarily focused on low labour costs, to a high-tech, skill-intensive nation with advanced production capacities,” stated Troy Griffiths, deputy managing director of Savills Vietnam.

Key investors, including South Korea, Singapore, and Japan, indicate a shift to high-tech and high-value production.

It now makes up around 63% of FDI inflows, thereby overshadowing traditional low-cost manufacturing sectors. By 2025, high-value industries and FDI are expected to sustain strong demand for industrial real estate.

The country’s transition towards high-value-added manufacturing, supported by expanding logistics and data centre capacity, is elevating its position within the global supply chain, according to Savills Vietnam's report. 

The nation is therefore in the process of stepping up infrastructure spending, allocating 7% of GDP to key projects, including the North-South Expressway, Long Thanh International Airport, and deep-water ports like Cai Mep in Ba Ria-Vung Tau.

Digital connectivity can also be viewed as a priority, with 5G network expansion and data centre developments driving e-commerce and logistics growth. 

The Savills Vietnam expert highlighted that with the booming e-commerce sector coupled with rising FDI, demand for warehouses and ready-built industrial spaces has increased.

This year has seen the supply of ready-built factories and warehouses soar by 31%, with occupancy rates surpassing 80% in key regions.

Vietnamese warehousing costs remain highly competitive, averaging US$5.6 per square metre, the report said.