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Vietnam’s property market strongly performs in 2024 on solid fundamentals: Knight Frank

Published

2 weeks ago

February 25, 2025

Vietnam’s real estate market made a strong performance in 2024 across the office, ready-built factories/warehouses, and apartment segments thanks to solid fundamentals, write Knight Frank analysts.

A property project built by Hoa Binh Construction Group. Photo courtesy of Thanh Nien (Young People) newspaper.

Vietnam stands as one of the top three emerging regional markets in 2025, alongside India and Indonesia, in terms of industrial and investment growth.

The country demonstrates strong potential for foreign direct investment (FDI), driven by its strategic location, favorable demographics, and open policies. Supported by solid fundamentals, Vietnam’s property market delivered a strong performance in 2024 across offices, ready-built factories/warehouses, and apartments.

Office market

In 2024, Vietnam’s office market surged with net absorption exceeding 160,000 square meters, the highest in five years, fueled by robust expansions in IT, technology and finance. This rebound contained a clear “flight to quality” as newly completed, green-certified buildings in Ho Chi Minh City and Hanoi captured large-scale transactions.

HCMC welcomed over 118,000 m2 of new supply, primarily in prime District 1 locations such as The Nexus, Riverfront Financial Centre, ThaiSquare The Merit, and e.town 6 in Tan Binh district.

Meanwhile, Hanoi recorded nearly 87,000 m2 of new space, attracting strong interest during pre-leases thanks to high construction quality and competitive terms. Although average asking rents remained elevated in both cities, landlords offered more flexible policies, including rent-free periods and discounted rates over fixed terms.

Over the next two years, major pipeline projects like Marina Central Tower, Lotus Tower (both HCMC), and Tien Bo Plaza (Hanoi) will further boost supply.

Grade A developments in HCMC will remain concentrated in District 1, reinforcing its status as a premier socio-economic hub. Meanwhile, Hanoi continues shifting premium supply westward in line with its vision of creating a new business center by 2035.

“2024 was a record year, with many significant contracts successfully completed. In 2025, leasing activities are expected to grow steadily in both HCMC and Hanoi. Buildings will actively enhance their leasing plans, focusing on competitive pricing, better services, and enticing leasing terms to meet tenant needs and ensure sustained demand.” said Leo Nguyen, senior director, occupier strategy & solutions, Knight Frank Vietnam.

Ready-built factory/warehouse market

Vietnam’s advantageous location and cost competitiveness have solidified its role as a key “China-plus-one” destination, especially since the U.S.-China trade war in 2018. Over the past six years, Vietnam’s RBF/RBW market has doubled its total supply from 6.6 million m2 in 2018 to over 15.6 million m2 in 2024, largely driven by institutional developers such as BW, SLP, Frasers, Cainiao, and KCN Vietnam.

Bac Ninh and Hai Phong remain prominent industrial hubs in the North, with new supply such as BW Thuan Thanh 3B – Phase 1, Industrial Center Yen Phong 2C – Phase 1, BW ESR Nam Dinh Vu, and SLP Park Bac Ninh.

In the South, Dong Nai and Long An continue to be hot spots, highlighted by KCN Ho Nai, KCN Phu An Thanh, BW Xuyen A, and SLP Park Long Hau. Modern facilities with higher quality specifications pushed up overall asking rents in 2024, and the rental gap between North and South narrowed significantly.

vietnam-ready-built-factory-ready-built-warehouse-market-2024-0838

Occupancy rates in both regions averaged above 80% in 2024, buoyed by e-commerce expansion and manufacturing inflows from Chinese and European SMEs. Looking ahead, ESG-compliant properties and hybrid products are likely to gain momentum, while land availability, competitive rents, and ongoing infrastructure upgrades pave the way for Tier-2 markets such as Ha Nam, Bac Giang, Vinh Phuc, and Binh Phuoc to grow further.

“Demand for ready-built warehouses and factories in 2025 will remain strong, driven by the shift of manufacturing from China and government support for manufacturing and trade to achieve 8% GDP growth,” said Son Hoang, valuation and advisory associate director, Knight Frank Vietnam.

Apartment market

The Hanoi apartment market burgeoned in 2024, with 27,268 new units representing a three-fold increase in new supply from 2023. The West (Nam Tu Liem district) and the East (Gia Lam district) dominated with nearly 24,300 units, mainly from township projects, which accounted for more than 80% of the total new supply.

In contrast, tightening credit control on real estate, bond fraud, and legal struggles in 2023-2024 continued to delay new apartment developments in HCMC, with only 4,888 new units in 2024, down 58% year-over-year. Thu Duc city (the East) led market supply, with more than 2,400 units.

After hitting its lowest point in 2023, HCMC apartment demand indicated slight signs of recovery with an absorption rate of 63%, equivalent to 6,234 sold units. Demand showed a positive sales volume in Thu Duc city (the East), with nearly 4,200 units, contributing 67% of total yearly units sold.

In contrast to the HCMC market, Hanoi apartment demand experienced a sharp increase, with a 98% absorption rate, translating into more than 30,700 units sold. This represents three times the sales volume of 2023 and the highest level achieved over the past five years.

Demand mainly came from township projects located in the West (Nam Tu Liem district) and the East (Gia Lam district), which accounted for 87% of total sales volume, equivalent to more than 15,800 and 10,700 units sold, respectively.

In 2024, HCMC’s average primary price stayed around $3,619 per m2, up 12% year-over-year, while Hanoi’s price shortened the gap to HCMC, with a robust year-over-year increase of 35%, reaching $2,910 per m2.

In the 2025-2026 period, HCMC is projected to welcome more than 24,000 units, with nearly 8,600 units in 2025 and 15,400 units in 2026. Meanwhile, Hanoi is expected to have more than 20,000 units each year, mainly from township projects.

“Integrated townships are redefining modern living with an optimal mix of international-quality products and extensive amenities. These townships dominated the market in 2024 and are expected to account for nearly half of the city’s future supply over the next 5-7 years,” noted Son Hoang.

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Real estate capital heading into suburban areas

Published

5 hours ago

March 12, 2025

Industrialzone.net

The shortage of affordable apartments in Ho Chi Minh City has led buyers with tight budgets to seek properties in neighbouring markets.

The real estate market in Ho Chi Minh City is facing a scarcity of land, while the cost of project development is continuing to rise. This has forced investors to carefully consider which product segments to focus on to ensure profits.

Real estate capital heading into suburban areas

Photo: baodautu.vn

Investors with land in strategic locations close to the city centre are prioritising the development of mid-range and high-end products to optimise financial outcomes.

As a result, buyers seeking affordable options are being forced to look elsewhere.

“The shortage of affordable apartments in Ho Chi Minh City has led buyers with limited finances to seek items in neighbourhoods like Binh Duong, Dong Nai, and Long An. In these areas, apartment prices hover at around $1,200-$1,600 per square metre, creating strong demand,” said Giang Huynh, head of research and S22M at Savills Ho Chi Minh City.

From another perspective, the average rental yield for apartments in Binh Duong is currently 4.7 per cent, well above the 3.7 per cent yield in Hanoi and 3.6 per cent in Ho Chi Minh City.

Dinh Minh Tuan, southern regional director of real estate trading platform Batdongsan.com.vn, shared that the high rental yield in Binh Duong is largely due to reasonably priced luxury apartments, with high rental prices and stable occupancy rates.

On average, a luxury apartment in Binh Duong can be rented for $400-$480 per month for a one-bedroom unit, and from $600-$800 for a two- to three-bedroom unit.

Meanwhile, in Ho Chi Minh City or Hanoi, apartments in the $1,800-$2,000 per square metre range can only be rented for around $280-$480 per month, depending on the number of bedrooms, not to mention the increasingly stiff competition in enticing tenants.

In response to the strong capital shift, real estate firms in Ho Chi Minh City’s suburban areas are accelerating legal procedures to launch new projects.

This trend reflects the investors’ agility and creates attractive opportunities for both homebuyers and investors in 2025.

Accordingly, Kim Oanh Group plans to launch a 27-hectare urban area in New Binh Duong City in the first quarter of 2025.

This will be the first project the company has collaborated on with Surbana Jurong, a partner from Singapore, under EDGE green standards.

The project features 1,656 townhouses and terraced houses, and 1,666 social apartments, priced from $28,000 per unit.

Major developer Phat Dat Real Estate Development Corporation plans to launch two major projects, Thuan An 1 and 2 in Binh Duong province, covering a total area of 4.46 ha.

The 1.8ha Thuan An 1 will provide 2,604 apartments and shophouses, while the 2.66ha Thuan An 2 will have 3,270 apartments and 16 townhouses. These projects are located on key roads.

Simultaneously, southern developer An Gia Group plans the launch of 3,000 apartments at The Gio Riverside and 76 shophouses in Di An city.

The three-hectare project, located on the provincial route DT16, offers nicely designed apartments with one to two bedrooms.

Regarding opportunities for homeownership, Phan Cong Chanh, an expert in real estate investment, noted that owning a home requires solid knowledge and time to raise financial resources.

For young people, buying a home immediately is a challenge due to limited finances.

Buyers can explore financial support packages and use leverage to shorten the time needed to purchase real estate. This needs to be accompanied by a reasonable plan to ensure long-term affordability.

“Overall, owning a home is not just a purchasing decision; it also requires a smart financial strategy. Whether choosing to buy immediately, rent, or invest in real estate in any segment, individuals must consider their financial conditions and personal plans carefully,” said Chanh.

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VinFast looks to long term with operational roadmap

Published

7 hours ago

March 12, 2025

Industrialzone.net

Carmaker VinFast aims to become a powerhouse in the electric vehicle market as it grapples with tougher competition abroad.

VinFast looks to long term with operational roadmap

The company wants to double EV sales when compared to last year’s figure

Potential investment from JTA Investment through an MoU between Vingroup and Qatar Investment Fund, which was unveiled last week, aligns perfectly with VinFast’s ambitious vision of scaling up production and sales in a competitive international market, the company said.

JTA Investment is exploring a potential equity investment of at least $1 billion in VinFast, the Nasdaq-listed EV manufacturer, as well as a strategic partnership aimed at supporting the company’s global expansion and technological development.

“This collaboration will unlock significant opportunities for Vingroup and its subsidiaries to drive technological, infrastructural, and sustainable economic advancement in Vietnam, while establishing a foundation for international expansion,” said Le Thi Thu Thuy, vice chairwoman of Vingroup.

Global electric vehicle (EV) competition is expected to get tougher as the demand for EVs is projected to increase further this year, but the outlook is being hindered by uncertainty surrounding tariffs and policy changes.

In 2025, S&P Global Mobility projects that 15.1 million battery EVs will be sold worldwide, a 30 per cent increase on last year. It is anticipated that 16.7 per cent of the light vehicle market will be made up of battery-based EVs.

S&P also reported that major unknowns await Chinese manufacturers BYD and Tesla in 2025 due to assumed changes to the US Inflation Reduction Act.

Last year, VinFast stated that it was delaying the opening of its North Carolina factory until 2028, which will allow the company to optimise its capital allocation and manage short-term spending more effectively, focusing more resources on supporting near-term growth targets and strengthening existing operations.

The company is expanding its strategy in India, Indonesia, and the Philippines, where EV infrastructure is developing rapidly but competition from domestic brands is limited. Experts said that in order to sustain long-term growth, it needs to compete with Chinese manufacturers and prove its competitiveness beyond its home market.

VinFast is scheduled to open factories in Subang, West Java and in the southern Indian state of Tamil Nadu this year. The plan to expand into India aims to seize growth opportunities in the world’s most populous nation and rapidly expanding EV market.

On February 28, VinFast and Motech Automotive Service Centres, through its franchisor and operator in the Philippines, signed an MoU on expanding the service network for VinFast’s EVs in the market. The agreement aims to meet the increasing demand for EVs among Filipino consumers, while affirming VinFast’s long-term commitment and determination to utilise green transformation across the region.

VinFast and Motech will collaborate to accredit over 60 Motech service workshops as approved VinFast service centres. In the Philippines, these service centres will have the authority to handle VinFast EV maintenance, warranties, and repairs. This year, VinFast intends to open over 100 similar service workshops throughout the Philippines.

In 2025, the company has set the ambitious target of doubling sales to around 200,000 EV globally after announcing impressive results in 2024, with 97,300 EVs sold globally, of which about 87,000 vehicles came from the domestic market.

Project

M&As in crucial sectors poised for rapid expansion

Published

9 hours ago

March 12, 2025

Industrialzone.net

Following the downturn, Vietnam’s merger and acquisition landscape is set to gain momentum in 2025, driven by spearhead industries from technology to manufacturing. Julien Curtet, partner of Index Partners, shared with VIR’s Thanh Van his insights into the overview and the prospect of the market.

How do you see Vietnam’s merger and acquisition (M&A) market affected by global market volatility?

M&As in crucial sectors poised for rapid expansion

Julien Curtet, partner of Index Partners

In 2024, global M&A activity rebounded, reaching approximately $3.5 trillion (a 15 per cent increase from 2023) with around 7,500 deals above $30 million. Corporate acquisitions rose by 12 per cent, and financial investor activity surged by 29 per cent, driven by private equity amid easing interest rates. Key sectors included technology, energy, financial services, and telecom.

Vietnam mirrored global trends with notable M&A activity in technology, energy, and industrial sectors, supported by a resilient macro and rising foreign investment.

In 2024, Vietnam’s M&A market experienced a downturn in transaction value, influenced by global economic uncertainties stemming from geopolitical tensions and currency fluctuations. However, deal volume reached around 160 transactions in the second half of 2024, marking a 25 per cent rise from the first half of 2024 and a 32 per cent jump from the second half of 2023, signalling a strong recovery trend and positive momentum for future growth. Some key deals in the second half of 2024 were Masan’s acquisition of an additional 7.1 per cent stake of VinCommerce from SK Group for $200 million, KIDO’s acquisition of Hung Vuong, Nvidia’s acquisition of VinBrain, and SK Group’s $300 million acquisition of Iscvina Manufacturing.

Mid-cap deals up to $25 million dominated Vietnam’s M&A market, accounting for just over half of total deal volume despite a 28 per cent drop in total transaction value. Mid-size transactions in the second half of the year included ADA’s acquisition of Customore and Elan’s $8.89 million acquisition of TMC Vietnam.

Could you shed light on some key drivers for the Vietnamese market in 2025 and beyond?

In 2025, it is set for strong growth, driven by key sectors such as infrastructure, technology, consumer, and manufacturing. Infrastructure will see a surge in investment, particularly in transportation and logistics, supported by government initiatives.

The technology sector is poised for rapid expansion, fuelled by favourable policies and accelerating digital transformation. Consumer spending is expected to rebound from a low base, signalling a recovery in the consumer sector.

Meanwhile, the manufacturing sector, which contributed over one-quarter of GDP in 2024, is projected to grow by 10 per cent in output, supported by new industrial zones and increased foreign investment.

The market is set to accelerate in the second half of 2025, fuelled by stable global interest rates and rising investor confidence.

Vietnam’s strong economic momentum, pro-investment policies, and booming sectors like technology, manufacturing, infrastructure, and recovery of consumer will drive deal activity, cementing its status as a key M&A hub in Southeast Asia.

How do foreign dealmakers approach strategies amidst global economic uncertainty, especially tariffs and new US policy?

Foreign dealmakers are reshaping their M&A strategies. Despite the challenges, Vietnam remains a key destination for cross-border investment, driven by its rapidly expanding technology, consumer, and manufacturing sectors.

Vietnam is rapidly advancing its technology sector, emerging as a significant player in the global digital landscape. Its commitment to technological innovation is evident through key partnerships, such as the collaboration with Nvidia to establish AI research and data centres in the country.

To further entice high-tech investments, the government offers substantial incentives, including up to four years of tax exemptions and a 50 per cent tax reduction for the subsequent nine years, as well as financial support from national sci-tech development funds.

Additionally, Vietnam’s consumer market is expected to recover in 2025, fuelled by a rising population, and increasing disposable incomes, boosting demand for goods and services. With consumer confidence rebounding and spending accelerating across sectors, Vietnam’s consumer market is regaining momentum as a vital driver of economic growth.

Vietnam is emerging as a manufacturing and logistics hub, attracting foreign investments due to its competitive labour costs (20–50 per cent lower than regional peers) and a 9.8 per cent increase in manufacturing output in 2024. An “anything but China” strategy is driving multinationals to shift production to Vietnam.

The country is also benefiting from major infrastructure projects, including the Long Thanh International Airport and deep-sea ports in Haiphong, are strengthening its logistics position, while expanding industrial areas and cross-border e-commerce fuel growth in both sectors.