Industrial property set to outperform rest of Vietnam realty market
Rising demand has sent occupancy rates and rents at industrial parks (IPs) and economic zones (EZs) in Vietnam soaring over the past year, providing a bright spot in the country’s real estate market.

Vietnam-Singapore Industrial Park 1 in Binh Duong province, southern Vietnam. Photo courtesy of VSIP.
Rising industrial rental prices
The average occupancy rate at operational IPs across the country stands above 70%, with the rate being circa 80% in key provinces in the north and 90% in key areas in the south. The rate has dipped slightly locally in provinces with available new supply.
Data from the Vietnam Association of Realtors (VARS) shows that industrial property rents rose around 20% in 2023 from a year earlier, with those in the north climbing the most.
In the north, the average rent was $135/square meter/lease cycle, representing an increase of 33% compared to 2022. Bac Ninh recorded the sharpest rental price increase of 40% to $160/m2/lease cycle due to new quality supply and higher demand from high-tech companies. The rental price in Hai Phong went up 30% to $125/m2/lease period.
Similarly, the average rental price in the south was $188/m2/lease period, an increase of 15% compared to 2022.
Long An saw an average rental price increase of 12% year-on-year, ranging from $140 to $300/m2/lease period. The average rental price in Dong Nai was up 20% over the same period, ranging from $120 to $240/m2/lease period, while the average rental price in Ba Ria-Vung Tau province jumped 30% year-on-year to $130/m2/lease period.
Meanwhile, Ho Chi Minh City and Binh Duong province did not record price fluctuations because the available industrial parks had been all filled with long-term lease cycles.
Doan Duy Hung, chairman of Vietnam Industrial Zone Investment Promotion JSC (IIP Vietnam), noted that rental prices have increased not only in industrial parks, but also in industrial clusters. Rents in several industrial clusters in the north rose 50-60% between the beginning of 2021 and the end of 2023.
Hung attributed the price increase over the past few years to improved infrastructure in the north, a better investment environment, abundant workforce, increased Chinese investment, and industrial land prices in the north still being lower than those in the south.
He predicted that rental prices at IPs and industrial clusters will continue rising in 2024 and beyond as site clearance costs will increase following the passage of the revised Land Law last November. Investment appetite among many domestic and foreign investors in developments of IPs and industrial clusters will remain robust.
As of 2023, Vietnam had 412 established IPs, including 368 located outside EZs, 37 in coastal EZs, and seven in border EZs, with a total area of 217,500 hectares.
There were also 293 operational IPs with a total industrial land area of about 63,000 ha. In addition, 119 IPs are under construction with a total natural land area of about 37,500 ha and industrial land area of 24,700 ha.
As of end-2023, IPs and EZs in Vietnam had attracted over 10,400 domestic investment projects and over 11,200 valid foreign-invested projects, with total registered investment of over VND2,540 trillion ($103.6 billion) and $231 billion, respectively, VARS data showed.
Registered foreign direct investment (FDI) in IPs and EZs has accounted for 35-40% of total FDI nationwide in recent years. Disbursement of FDI in IPs and EZs makes up around 30% of total investment capital in Vietnam. Therefore, FDI helps improve infrastructure and paves the way for the development of supporting industries as well as residential property in Vietnam.
Continued improvement
VARS has pointed out that increased industrial rental prices at higher levels than other regional countries, the application of the global minimum tax, and legal bottlenecks and policy troubles may dampen Vietnam’s competitive edges in attracting FDI.
However, there are several factors that can help further boost Vietnam’s industrial real estate market in 2024. Among them, the outlook for FDI flows is still positive with preferential tax policies, ongoing infrastructure investments, and increasingly improved auxiliary services at IPs.
Industrial real estate supply is growing in both the north and the south, with many IP projects having secured permission to carry out the next phases. Demand for industrial real estate remains high, especially multi-use warehouses and ready-built factories.
Demand is notably high among foreign investors who choose Vietnam as a destination for the shifting supply chain trend and expectations for increased cooperation thanks to active diplomacy, especially the upgrade of the Vietnam-U.S. relationship to a comprehensive strategic partnership last September.
In addition, many provinces and cities have had their master plans approved for the 2021-2030 period, helping partly solve problems related to legal procedures for IPs.
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