Industrial real estate in southern Vietnam catching majors
2022 has proven an exciting year for the industrial real estate market in southern Vietnam as waves of new foreign investment enter the country.
Can Tho, the Mekong Delta’s economic hub, is seeking to speed up its development as the National Assembly has issued a resolution on a specific mechanism for the city, including incentives in terms of administrative procedures, taxes, customs, and land rent, for businesses investing in the city. Mekong Delta is Vietnam’s rice bowl and accounts for about 20% of the global rice trade.
The city is focusing on developing Vietnam-Singapore Industrial Park Can Tho (VSIP Can Tho), O Mon Energy Center project, and a regional agricultural production center, Le Quang Manh, the city’s Party Chief, said.
The VSIP Can Tho project, which is waiting for prime ministerial approval, is set to cover 300 hectares inside Vinh Thanh, a 900-hectare industrial park project already approved by the government and listed by the city’s administration as one of the infrastructure projects calling for investments in the 2021-2025 period.
Can Tho is pinning its hopes on VSIP Can Tho as VSIP projects in Vietnam, developed by VSIP Joint Venture Co., a partnership between Singapore’s Sembcorp Industries and Binh Duong province’s Becamex IDC, are seen as a symbol of successful economic ties between Singapore and Vietnam.

VSIP Binh Duong I in Binh Duong Province, southern Vietnam. Photo courtesy of Sembcorp.
In May this year, the joint venture broke ground on VSIP Binh Duong III in Binh Duong, an industrial province bordering Ho Chi Minh City. A major tenant in the $280-million IP is Danish toymaker Lego, which is investing more than $1 billion to build a smart factory covering more than 44 hectares as its sixth facility worldwide.
According to the joint venture, more than 30 Vietnamese and foreign corporations have shown interest to place their manufacturing in the new industrial park, with intentions to rent more than 176 hectares.
Denmark-headquartered Pandora, the world’s largest jewelry brand by revenue, has also selected VSIP Binh Duong III to build a $100 million new crafting plant, its third manufacturing site globally and first outside Thailand. Pandora signed a memorandum of understanding in Binh Duong for this investment last week.
Denmark’s Ambassador to Vietnam, Kim Højlund Christensen, said, “Vietnam has become an attractive destination for Danish companies, not least due to its green transformation of the economy."
BW Industrial Development, a joint venture between American investment giant Warburg Pincus and Becamex, in March announced its acquisition of 21 hectares of land in Vinh Loc 2 IP and 22.3 hectares in Xuyen A IP. The transaction marked BW’s first entry into Long An province.
Vinh Loc 2 IP is situated along National Highway 1A and Ho Chi Minh-Trung Luong Expressway, thus having convenient access to central HCMC from Mekong Delta.
Meanwhile, Xuyen A IP stands along the Asian Highway that connects HCMC with the Cambodian capital of Phnom Penh. It is less than 10 kilometers from Tan Phu Trung IP, where BW has been operating an e-commerce hub for more than two years.
Lance Li, CEO of BW, said: “We expect 2022 to be an exciting year for both the industrial and logistics real estate markets. Logistics delivery efficiency has become a strategic and fundamental value proposition for e-commerce giants and express companies. For them to work, good warehousing locations and strong infrastructure are vital."
Li added that for manufacturing, despite the Covid-induced disruption, Vietnam remains an important destination for foreign direct investments, as evidenced by $31 billion of committed in foreign direct investment in 2021, up 9.2% year-on-year, according to the Foreign Investment Agency.
"Many of our clients are waiting for their visa applications to be processed to be in Vietnam to make key decisions for their businesses."
Also showing confidence in Vietnam’s growth potential, Fuchs Group, a German lubrication giant, has just rented 20,000 square meters in Phu My 3 Specialized Industrial Park (PM3 SIP) in Ba Ria-Vung Tau province to build a factory, according to Savills Vietnam.
With a 55-year lease contract, Fuchs shows its long-term commitment to Vietnam. The giant said in February last year it had acquired 70% of the Vietnam-based lubricant business of distributor STD & S Co. The business was then integrated into its subsidiary Fuchs Lubricants Vietnam, in which the owner of STD & S holds a 30% stake.
The joint venture enabled Fuchs to offer its customers automotive, industrial, mining, and specialty lubricants from a single source.
February this year saw German leading plastic tech manufacturer Framas ink a deal with KTG Industrial to lease for 10 years a 20,000 sq.m facility at KTG Industrial Nhon Trach 2 IP in Dong Nai province, also next to HCMC.
In the same month, Australian industrial developer Logos established a joint venture with Manulife Investment Management to acquire an 11-hectare, build-to-suit logistics asset in Dong Nai’s Dau Giay IP.
The property comprises three high-tech warehouse facilities, two of which were completed in 2021 and the third set for completion in late 2022. Upon completion, it will total 116,000 square meters of modern logistics space valued at over $80 million. The property is 100% committed to a global occupier on an initial five-year lease term, Logos said but did not disclose the occupier’s name.
Logos’ Head of Vietnam, Glenn Hughes, noted: “We are seeing many exciting opportunities in Vietnam as international companies continue to diversify their supply chains across multiple countries, investing in their facilities to ensure supply chain resilience while meeting the growing consumer demands of e-commerce."
He added, "The property is a rare opportunity to acquire a significant institutional-grade asset within a fast-growing Dong Nai precinct while also supporting the growing needs of this market."
On top of the rush to invest in Vietnam’s industrial real estate market is Singapore-based GLP, Asia’s biggest warehouse operator. In January, GLP established its first Vietnamese logistics development fund, GLP Vietnam Development Partners I (GLP VDP I), with an investment capacity of $1.1 billion.
The GLP VDP I fund will focus on developing modern and environmentally-friendly logistics facilities in Hanoi, HCMC and their adjacent areas, with six seeded development sites and a total land area of close to 900,000 square meters.
“The fund has a robust development pipeline of further opportunities and is set to become one of the largest logistics development funds in Southeast Asia.”
Through this fund’s establishment, GLP welcomes several new investors to its fund management platform, including the Dutch pension fund manager APG Asset Management and Manulife, a Canada-based global financial services provider.
JLL’s industrial real estate market report for this year’s first quarter shows that industrial land prices in Vietnam have maintained a strong growth momentum (up 8.5%) due to new FDI waves entering Vietnam post pandemic. The average annual rent for industrial land is $120 a square meter.
The property consultancy said the ready-built factory market has moved toward a larger scale to meet customer needs, especially international ones who choose to establish or expand production in the country.
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