Vietnam industrial real estate enters race for new capital
As foreign direct investment becomes increasingly selective and low costs cease to be a competitive advantage, Vietnam’s industrial real estate developers are being forced to reinvent themselves, demonstrating project execution capabilities, cost management expertise, and compliance with green standards.
When land banks no longer enough
For the past two decades, Vietnam’s industrial real estate has relied on a “golden trio” of advantages: inexpensive land, low-cost labor, and tax incentives. These factors fulfilled their historical role by attracting the first wave of FDI and laying the foundation for the country’s industrialization. Today, however, they are no longer sufficient to retain a new generation of investors.
“Finding cheap land, securing incentives, and building as quickly as possible is no longer a winning formula for industrial real estate,” said Vu Minh Chi, director of industrial services at Avison Young Vietnam.
According to Chi, emerging sectors such as energy, technology, and digital infrastructure require industrial parks to meet highly specific technical requirements in order to ensure efficient operating costs and support broader industrial ecosystems.
“In the past, companies typically looked for cleared land with lease terms of 25 to 30 years. Today, FDI investors often require leases of at least 35 years, along with a range of additional conditions to support long-term investment planning and cash flow calculations,” he said.
Sharing the same view, Nguyen Anh Nguyet, an industrial park analyst at FPT Securities (FPTS), noted that the sector is transitioning from a period of limited supply to one of strong expansion, with industrial park land expected to increase by roughly 14% by 2028.
At the same time, land clearance and construction costs have risen by between 25% and more than 81% compared with previous periods. Green and smart industrial parks require construction investments that are 20-30% higher than conventional developments.
“This means that merely owning a land bank is no longer enough. To attract investment capital, developers must also demonstrate strong cost management and cash flow control capabilities at a time when investment expenses are rising sharply,” she said.
On investment criteria, Nguyet said that tenants, particularly foreign investors, are no longer simply leasing land but are selecting production environments that align with their operational requirements, prioritizing environmental, social and governance (ESG) standards, low-carbon emissions, and stable energy infrastructure.
The FPTS expert expected industrial land rents to continue rising, albeit at a slower pace of around 2-3% annually due to abundant new supply. Northern Vietnam is seen as having greater room for rental growth than the south, given its lower current price base and its strong appeal to high-tech manufacturers such as Samsung, Apple, and Foxconn.
Industrial real estate transforms in 2026
The business performance of several industry players reflects these broader market shifts.
According to its Q1 financial results, core industrial real estate revenue at major developer Becamex IDC Corp. (HoSE: BCM) fell 47% year-on-year to VND754 billion ($28.64 million), weighing on the company’s overall performance.
Becamex reported net revenue of VND1.1 trillion ($41.78 milion) for the quarter, down 40% from a year earlier, while net profit declined 22% to nearly VND280 billion ($10.63 million), marking its weakest quarterly result since the second quarter of 2024.
Documents prepared for the company’s upcoming annual shareholders’ meeting on June 28 show that Becamex is targeting consolidated revenue of VND10.23 trillion ($388.53 million) and after-tax profit of VND3.88 trillion ($147.36 million) this year, up 4% and 10%, respectively, from 2025.
After the first quarter, the company had completed just 12% and 7% of its respective revenue and profit targets.
The group plans to continue developing next-generation smart eco-industrial parks, focusing on renewable energy, water recycling, and emissions reduction. Key projects include the 380-hectare Phase 2 of Bau Bang Expansion Industrial Park and the 700-hectare Cay Truong Industrial Park in Ho Chi Minh City.
The firm aims to gradually transform traditional industrial parks through automation and sustainability initiatives. It is also studying investments in digital technology zones and science and technology industrial parks in HCMC in the coming years.
Another notable name highlighted by FPTS is Sai Gon VRG Investment Corporation (HoSE: SIP). In the first quarter, the company posted a 12% year-on-year increase in revenue to VND2.17 trillion ($82.42 million), although after-tax profit declined 11% to VND357 billion ($13.56 million). The company had achieved 41% of its full-year profit target.
Industrial land leasing revenue remained stable at VND117 billion ($4.44 million), with gross margins holding at 70.6%. Leasing activity was particularly strong, with more than 49 hectares signed during the first quarter of 2026, equivalent to 72% of the total area leased throughout 2025 and 82% of the company’s full-year leasing target for 2026.
Of that total, 35 hectares were leased at Phuoc Dong Industrial Park in Tay Ninh province, mainly to rubber product manufacturers, while 14.3 hectares at Loc An-Binh Son Industrial Park in Dong Nai were leased to logistics operators Transimex and CJ Korea Logistics.
ACB Securities (ACBS) expected investment attraction at Loc An-Binh Son Industrial Park and Phase 2 of Long Duc Industrial Park to remain encouraging, supported by Dong Nai province’s centrally governed city status and the planned commercial operation of Long Thanh International Airport by the end of 2026. With several new industrial parks set to launch in Dong Nai, rental rates at these projects are forecast to remain competitive rather than experiencing sharp increases.
Meanwhile, Long Hau Corporation (HoSE: LHG), one of the pioneers in ESG-focused industrial real estate development, reported positive results, having achieved 34% and 68% of the year's revenue and profit targets approved at the 2026 annual shareholders’ meeting.
In the first quarter, Long Hau generated net revenue of more than VND176 billion ($6.68 million), down 25% year-on-year, largely due to lower income from serviced land leases and built-to-suit factory rentals. Despite the decline in revenue, its net profit edged higher to more than VND112 billion ($4.25 million).
In its core business segment, Long Hau currently operates approximately 200,000 square meters of ready-built factories. In March 2026, the company broke ground on Long Hau LEED Park, an ESG-compliant warehouse and manufacturing complex developed under the internationally recognized LEED Certified green building standard.
The project incorporates energy optimization solutions, water management systems, improved workplace environmental quality, and environmentally friendly construction materials. Scheduled for completion of Phase 1 in November 2026, Long Hau LEED Park targets industries including electronics, medical equipment, precision engineering, logistics, and research and development - sectors that are expected to drive the next wave of FDI inflows. It is among the few production and logistics developments in southern Vietnam to meet LEED standards.
Amid market volatility and adjustments to tax incentive policies, Long Hau has shifted its investment attraction strategy away from incentives and toward core strengths such as location, infrastructure quality, production space, and integrated service ecosystems. The company is among the few industrial park developers in Vietnam that fully satisfy all four ESG pillars.
For 2026, Long Hau has identified increasing factory occupancy rates as a key priority to ensure operational efficiency and achieve its revenue targets. Current occupancy exceeds 95%, with the first phase of its six-story multi-storey factory reaching 97% occupancy and the second phase, comprising nine floors, about 95%.
Source: Lien Thuong, Minh Hue
Photo: Photo courtesy of Becamex
