South-central Vietnam’s industrial real estate market heats up with new wave of projects

The industrial real estate market in south-central Vietnam is seeing a surge in activity, as multiple large-scale projects have broken ground across the region.

The south-central region included Danang city and the provinces of Quang Ngai, Gia Lai, Dak Lak, Khanh Hoa, and Lam Dong.

Local governments are increasingly positioning industrial development as a key driver of economic growth.

Race to expand industrial land bank

The centrally-managed city of Da Nang is emerging as a strategic industrial investment hub, particularly after its merger with Quang Nam province and future plans for a free trade zone.

New infrastructure developments are underway, including the 400-hectare Hoa Ninh Industrial Park (IP) with an investment of over VND6.2 trillion ($234.7 million) and the 346-hectare Nam Thang Binh IP (Phase B) backed by BIN Corporation with VND3.37 trillion in funding.

Other upcoming projects include Hoa Nhon and Hoa Cam Phase II IPs and several smaller industrial clusters.

In Gia Lai province (after the merger of Gia Lai and Binh Dinh), the Phu My IP phase I, led by Phu My Investment Group, has broken ground with a total area of 437 hectares and capital investment exceeding VND4.5 trillion ($173 million). The park is expected to be ready for leasing by Q1/2026.

Gia Lai is also developing the Phu My Deepwater Port, capable of accommodating vessels over 200,000 DWT. Once operational, the port is set to significantly boost logistics efficiency and international trade capacity in the region.

Similarly, Khanh Hoa province (after the merger of Khanh Hoa and Ninh Thuan) has begun construction of the 288-hectare Doc Da Trang IP, invested by Viglacera Yen My Industrial Zone Development JSC, with VND1.8 trillion ($68.14 million) in investment capital.

The park is expected to create 16,000 jobs and focus on clean industries, high-tech manufacturing, electronics, logistics, and precision engineering.

Dak Lak province (after the merger of Phu Yen and Dak Lak) has also joined the trend with a 250-hectare high-tech IP in Hoa Hiep ward, developed by N&G Group with nearly VND2.4 trillion ($90.8 million).

Meanwhile, steel giant Hoa Phat Group has launched phase I of the Hoa Tam IP, covering nearly 492 hectares with VND4.2 trillion ($158.9 million) in investment. The park will support a future Hoa Phat steel complex, projected to produce 6 million tons of steel annually and cost an estimated VND84 trillion ($3.18 billion).

Additionally, Hoa Phat is investing VND16.3 trillion in the Bai Goc Port, spanning over 306 hectares. According to chairman Tran Dinh Long, the total investment for the port and steel complex will reach VND120 trillion ($4.54 billion) between 2025-2030.

The first phase of the steel plant is expected to become operational in late 2025, with a capacity of 3 million tons per year, pushing Hoa Phat’s total annual steel output to 22 million tons.

“These developments will significantly elevate Vietnam’s position on the global steel map, contribute VND10 trillion ($378.36 million) annually to the local budget, and create over 15,000 direct jobs,” Long said.

Industrial real estate transactions on the rise

Director of Khanh Hoa’s Department of Finance Chau Ngo Anh Nhan stated that the province is focusing on four pillars for future growth: industry, energy, tourism-services, and urban development.

Industrial development, particularly in high-tech, electronics, and logistics, is expected to be the main engine of double-digit economic growth from 2026 to 2030.

Efforts are also being made to upgrade and expand economic zones like Van Phong and establish new ones in the south-central coastal areas. Key IPs such as Ninh Diem, Ninh Xuan, and Ca Na are being prioritized for investment.

Dak Lak is also targeting sustainable industrial development to boost revenues and local employment. The province is courting strategic investors for high-value sectors such as metallurgy, petrochemicals, energy, and high-end tourism.

Thomas Rooney, associate director of industrial services at Savills Hanoi, said industrial real estate transactions in central Vietnam nearly doubled in the first half of 2025 compared to the previous year, with demand dominated by short-term factory leases of 3-5 years.

There are strong opportunities for investors in central Vietnam as more well-planned IPs come online, Rooney said, citing favorable infrastructure, competitive land costs, and attractive tax incentives.

He noted that the region offers abundant, affordable labor and is actively training its workforce in technologies like AI, data science, and semiconductor manufacturing.

According to the Ministry of Construction, industrial land rents in Q2/2025 remained largely stable, with slight increases in select areas. Average rents in central Vietnam were around $70 per square meter per lease cycle, with occupancy rates at about 70%.

In the first half of 2025, FDI into real estate hit $5.17 billion, accounting for 24% of total FDI and more than doubling from the same period last year, according to the Foreign Investment Agency.

The construction ministry considers this a strong indicator of continued confidence in Vietnam’s industrial property market among global investors.