Vietnam's industrial real estate sector continues to flourish, revitalizing the country’s property market, as multinational firms choose the country for their global supply chain diversification.

Suntory PepsiCo Vietnam – a joint venture between American giant Pepsi and Japan's Suntory – started the construction of its sixth Vietnam factory in Long An province, which borders Ho Chi Minh City, on April 8.

With an expected investment of US$300 million, this will be Pepsi's largest factory in Asia-Pacific. The project was approved in July 2023 with US$185 million in registered capital, but the latest update shows the commitment will exceed US$300 million.

The project has a production capacity of up to 800 million litres per year. On an area of 20 hectares, the new site will be powered by both biomass and solar energy, grouped in renewable energy sources. The state-of-the-art factory will also produce packaging materials made of 100% environment-friendly recycled plastic. Pepsi expects production to begin by the first quarter of 2026.

Suntory PepsiCo Vietnam is operating five factories in Can Tho, Dong Nai and Ho Chi Minh City in the south, Quang Nam province in the central region, and Bac Ninh province in the north.

In Long An province, where Pepsi is building the sixth facility, rival Coca-Cola is also constructing a US$136 million factory on a 19-hectare site, designed to produce more than 1 billion litres of beverage per year.

Southern development speeds up

In the Southern Key Economic Region, whose hub is Ho Chi Minh City, Binh Duong province is accelerating the construction of more industrial parks.

At a conference on March 15, Nguyen Trung Tin, head of the provincial management board of industrial parks, said his province would build 10 new industrial parks in the 2023-2030 period.

By the end of 2025, the province plans to establish two new industrial parks with a total land use area of about 1,000 hectares in Bac Tan Uyen district and Tan Uyen town. By the end of 2030, the province plans to build eight more industrial parks covering over 6,000 hectares in all.

In Binh Duong, Becamex IDC – the Vietnamese side in an industrial park joint venture between VSIP Group and Singapore's Sembcorp Industries – reported a revenue at 8,204 billion dong (US$330 million) in 2023, up 25% from the previous year, and an after-tax profit of 2,314 billion dong, up 34% from 2022.

Similarly, Nam Tan Uyen Industrial Park Joint Stock Company, which operates three industrial parks in Binh Duong with a total area of nearly 970 hectares, achieved the highest profit over the last five years – nearly 300 billion dong in 2023.

WHA expects more FDI flows

In Ba Ria - Vung Tau, also in the Southern Key Economic Region, the province’s approved development planning for the 2021-2030 period with vision to 2050 says that Chau Duc district has 4,200 hectares planned for industrial park development. Thailand's largest industrial park developer WHA has selected this district to make research for its plans to build a 1,200-hectare industrial park.

Jareeporn Jarukornsakul, WHA chair and chief executive officer, came to Ba Ria - Vung Tau early this March to meet with provincial leaders and discuss plans for the new development.

WHA has so far invested US$200 million in Vietnam and has set aside US$1 billion for further expansion in the country over the next five years, setting its sights on new foreign direct investments.

Also in March, Korea's CS Wind Group, one of the world's leading wind tower manufacturers, opened its second factory in Ba Ria - Vung Tau. The new facility is located next to its first factory in Phu My 1 Industrial Park, Phu My town.

CS Wind's customers include Siemens Gamesa, the world's No. 1 offshore wind turbine manufacturer, and other leading players like Vestas, GE, and Goldwind.

Under the supply contracts worth nearly US$3.4 billion signed at the end of 2022, CS Wind will provide Siemens Gamesa with wind towers from May 2024 to December 2030 for offshore wind power projects in European, American, and Asian countries.

CS Wind's supply will come from its factories in Vietnam and Portugal, according to the deals.

More projects approved

Also in Phu My town, Beijing BOE Display is set to build a US$277.5 million factory in Phu My 3 Specialized Industrial Park. The production site will make displays, circuit boards, and other electronic components.

It is expected that when operating in 2026, the facility will employ thousands of workers. The Chinese producer received an investment licence for the project on March 30 2014. This is BOE's second project in Vietnam after a similar facility in neighbouring Dong Nai province was put into operation in 2019.

Also in Phu My 3 Specialized Industrial Park, Tosoh Corporation – a company specializing in chemicals and special products and materials in Japan – is spending US$176 million on its first chemicals and materials factory in Southeast Asia.

Tosoh's new factory will be built on an area of 120,000 square meters. The Japanese maker identifies Vietnam as the springboard to expand its business in Southeast Asia.

Deep-water port advantage

One of the advantages of this industrial park is its proximity to the Cai Mep - Thi Vai deep-water port cluster, one of Vietnam’s largest maritime logistics hubs. The port cluster has for years been added to the navigation maps of companies operating super container vessels.

Also on March 30, Korean giant Hyosung received a licence to increase capital by US$49 million for a polypropylene plastic production and underground liquefied petroleum gas storage complex in Phu My town. Hyosung's total investment in the project has reached US$1.6 billion.

On the same day, Electronic Tripod Vietnam, a subsidiary of Taiwanese manufacturer of electronics, machinery and medical equipment Tripod, received an investment licence to build a US$250 million factory in Ba Ria - Vung Tau’s Chau Duc Industrial Park. 

Prior to the March 30 event, Hyosung received an investment certificate for a nearly US$730 million project in Phu My 2 Industrial Park. This will be Hyosung’s first bio-based spandex plant in Asia. Spandex is an artificial stretchable material used for making body-hugging clothes.

Hyosung vice-president Lee Sang Woon said his group has so far invested more than US$4 billion in Vietnam and is pouring more capital into the country, in which Ba Ria - Vung Tau province is a strategic production area.

The Korean corporation intends to pump more than US$1 billion into its carbon fibre factory in the province, with plans to make it the company’s global carbon fibre production hub.

North lures investors

Industrial real estate in northern Vietnam is also developing vibrantly. Trang Bui, CEO of realty services firm Cushman & Wakefield Vietnam, says that this segment in the Vietnamese capital and Greater Hanoi Region is ready to welcome new investments.

"Our latest April research shows that the real estate market in Hanoi and key northern provinces has become extremely attractive and is ready to accelerate. The north's growth is driven by its infrastructure network of seven expressways, not to mention the seven ring roads being under construction. Another advantage is its proximity to China,” she says.

Many major industrial projects were commissioned in the north in 2023. Among them is the Thai Binh thermal power plant project with an investment capital of US$2 billion in Thai Binh province.

China's Jinko Solar, which is listed in New York, operates a US$1.5 billion solar panel production plant in Quang Ninh province. Korean electronic component maker LG Innotek Vietnam increased its investment capital in a plant in neighbouring Hai Phong City by US$1 billion last year.

In the semiconductor industry, Korean chipmaker Micron Hana launched a US$600 million factory in Bac Giang province near Hanoi last year, and is adding more capital.

American chipmaker Amkor Technology also opened a state-of-the-art plant in Bac Ninh bordering Hanoi last year, with plans to pour up to US$1.6 billion into the facility.

Foreign direct investment into Vietnam exceeded US$6.17 billion in Q1 2024, up 13.4% year-on-year, according to data from the Foreign Investment Agency, Ministry of Planning and Investment.  By the end of 2023, the country had 416 operational industrial parks. The total industrial land area was about 89,200 hectares, up 2% from the previous year.