The groundbreaking ceremony of VSIP II Quang Ngai Industrial Park in Quang Ngai province, Photo: Tang Thu

Numerous industrial parks (IPs) have received approval already this year in provinces such as Thai Nguyen, Bac Giang, and Binh Phuoc. Earlier this month, the groundbreaking ceremony for Song Cong II IP took place in the northern province of Thai Nguyen. The project spans almost 300 hectares, with a total investment of nearly $160 million.

A few weeks previously, Bac Ninh People’s Committee, also in the north, granted approval to Nghia Hung, My Thai, Song Mai-Nghia Trung, and Dong Phuc IPs.

In the central region, VSIP II Quang Ngai IP became the newest player in the field after the groundbreaking ceremony on March 12 with attendees coming from the government, and National Assemly Chairman Tran Thanh Man and Deputy Chairman Vu Hong Thanh. The initiative is located in Dung Quat Economic Zone with a total area of 498ha, and has a total investment of nearly $158 million.

Moving south, Bac Dong Phu IP, in Dong Xoai city of Binh Phuoc province, has been approved with a total investment of nearly $55 million and a land area of over 300 ha.

Speaking with VIR, Nguyen Thuong Lang, a senior lecturer at the National Economics University, highlighted that abundant foreign direct investment (FDI) inflows were a key driver behind the expansion of the industrial estate sector.

“The development of the industrial field, especially foreign investment in manufacturing, will be the main force driving the value of industrial real estate. According to the latest report from the Foreign Investment Agency, nearly 70 per cent of FDI inflows into Vietnam are directed towards manufacturing. Therefore, the upward trend in industrial real estate prices is both logical and inevitable,” Lang said.

According to the report released at the end of February, the manufacturing and processing sector led in attracting FDI, with slightly over $3.1 billion, marking a 50.6 per cent on year increase.

Lang also predicted strong growth in the industrial real estate market, suggesting that land rental prices will increase, particularly in prime locations.

Building on Lang’s prediction, Nguyen Hoai An, senior director at CBRE Hanoi Branch, said that over the next three years, industrial land rental fees are expected to increase by 4-8 per cent annually in the northern region and by 3-7 per cent annually in south.

“The primary drivers of this growth are the continuous development of new IPs, particularly in key markets such as Haiphong and Vinh Phuc in the north, as well as Binh Duong, Dong Nai, and Long An in the south,” An said.

An also pointed out that the expansion was not limited to traditional areas, as the development wave is spreading to central provinces like Thanh Hoa, Nghe An, Ha Tinh, and Quang Nam. In these emerging markets, professional developers are implementing new IP projects, helping to put these regions on Vietnam’s industrial map.

“For the ready-built warehouse and factory segment, rental prices are forecasted to rise slightly by 1-4 per cent per year during the same period. Although new supply remains high in both key industrial regions, demand for ready-built warehouses and factories is also showing signs of growth,” An added.

Discussing the outlook for the industrial real estate sector, Pham Thi Mien, deputy head of Market Research, Consulting and Investment Promotion, under the Vietnam Association of Real Estate Brokers, highlighted that the supply of new IPs was set to soar.

“Between 2024 and 2027, Vietnam is expected to add around 15,200ha of industrial land supply, along with more than six million sq.m of total warehouse and factory space. Alongside this supply expansion, demand is also growing positively, driven by the China+1 relocation trend and the implementation of trade commitments,” she said.

Under master plans for key markets for 2021-2030, provinces such as Binh Duong are expected to host 48-50 industrial areas, covering 25,000ha. Similarly, in Long An, the plan includes 51 IPs, covering almost 12,500ha.

In the north, Hai Duong province is approved for 32 IPs, covering approximately 5,600ha.

“I know quite a few people who have been developing small and medium-sized IPs in Hai Duong, Hung Yen, and Bac Giang. The moment they complete construction, partners from Hong Kong and China approach them with attractive rental offers,” said Tran Quang Trung, business development director at OneHousing.

“I see this as an excellent sign, when industrial real estate flourishes, it generates employment for local people. That, in turn, means higher incomes, enabling people to buy homes, invest, and improve their quality of life, ultimately fostering sustainable national development,” Trung added.

According to OneHousing’s representative, with the government’s target of raising per capita income by the end of 2025 and its roadmap towards 2030, industrial real estate is set to remain a highly lucrative segment, alongside commercial and residential real estate.

Meanwhile, Thomas Rooney, associate director of Industrial Services at Savills Hanoi, observed that Vietnam’s industrial real estate segment has been experiencing remarkable growth, with absorption rates for both industrial land and ready-built warehouses and factories rising significantly.

“Industrial land absorption rates in the north are now competing closely with those in the south, with a large proportion of available land already occupied. Notably, the ready-built warehouse and factory segment has seen strong uptake, with facilities being leased by manufacturers from Taiwan, China, Europe, and the United States,” he said.

A market upgrade could be possible later this year, photo Le Toan

On March 10, FTSE Russell announced that it would release the results of its mid-term national market classification review for Vietnam after the US market closes on April 8.

Minister of Finance Nguyen Van Thang also said that the resolutions from the plenary meeting of the Asia-Pacific Regional Committee (APRC) in late February, coupled with the prospect of market upgrade and robust economic growth, were expected to be key drivers for Vietnam’s stock market to enter a phase of deeper global integration.

“With a minimum GDP growth target of 8 per cent this year, the government will continue to strengthen policies supporting businesses, improve the investment environment, and enhance market governance standards to realise this goal,” Thang said. “The securities legal framework is also being refined, particularly with the revised Securities Law and related guiding documents, to create additional refinements for investors.”

Vietnam is currently one of two markets on FTSE Russell’s watch list for a potential upgrade.

“The outlook for Vietnam’s stock market upgrade to emerging market status this year is very positive. The Vietnam Securities Depository and Clearing Corporation (VSDC) expects FTSE Russell to positively assess the solutions implemented in the March review, making the possibility of an upgrade in September highly feasible, in line with investor expectations,” said Ta Thanh Binh, general director at the VSDC.

The VSDC is upgrading its electronic communication gateway, allowing securities firms and custodian banks to exchange foreign investor transaction data quickly and securely, replacing the current manual processes. This system is expected to be completed imminently, Binh added.

As part of the market upgrade efforts, on March 11, the Ho Chi Minh Stock Exchange announced a plan to test its new IT system, the KRX. The testing period is to run from March 17 to April 11, simulating stock trading operations as on a regular trading day.

“The expected rollout of the KRX system between late May and June is anticipated to improve market infrastructure and investor sentiment. The system has passed the national cybersecurity assessment, and broker-level testing is set to begin,” said Dao Minh Chau, associate director at SSI Research.

Although Vietnam has met key technical requirements, Chau said practical issues remain, including varied settlement cycles and inconsistencies in credit limits. Nonetheless, the State Securities Commission (SSC) is actively addressing these challenges in collaboration with international financial institutions.

On the same day, the SSC also announced plans to implement nine initiatives in 2025 to support the market upgrade, including operation of the KRX system and seven objectives targeted for completion before Q3.

The ultimate goal is to launch a central counterparty clearing (CCP) mechanism for Vietnam’s stock market, which the VSDC has committed to completing in 2026.

“The non-prefunding solution, which allows foreign investors to trade in accordance with FTSE’s criteria, is just an initial step. In the long-term vision for meeting MSCI’s upgrade requirements, implementing the CCP settlement mechanism will be a more crucial and strategic move,” said a VSDC representative.

The revised Securities Law, enacted late last year, has established the legal framework for the VSDC to set up a subsidiary to implement this CCP mechanism in line with international standards, and it is working intensively to execute this plan on schedule, the representative added.

By the end of the trading session on March 12, Vietnam’s stock market saw the VN-Index register its fifth consecutive positive session. Analysts at Vietnam Construction Securities forecast that upward momentum remains dominant, with no clear signals of a reversal. The VN-Index is expected to rise, aiming for a resistance level of 1,360-1,365 points.

Nguyen Duc Hoan, CEO of ACB Securities, emphasised that historical trends in regional markets show that before an official upgrade, stock markets often experience strong growth phases.

“This year is considered a crucial period for investors to accumulate shares in companies with significant potential,” he said. “However, the market also faces considerable challenges, particularly from global economic fluctuations. Trade conflicts, the risk of returning inflation, and the US Federal Reserve’s interest rate policies could all exert pressure on investment capital flows.”

At the APRC 2025 conference of the International Organisation of Securities Commissions (IOSCO), Vietnam became a signatory to a multilateral MoU on supervision of APRC. This marks a significant step in strengthening market oversight cooperation between Vietnam’s SSC and other securities regulatory bodies within APRC and IOSCO.