VIET NAM

Industrial Insider
Whitepaper 2023
 Industrial Market 2023 Industrial Market 2023

Regional
Overview
Population, 2023 ASEAN real GDP YoY growth Manufacturing salaries, 2019 - 2023 US$/month

10,0
1.600 45,0 1200

1.411
1.400 40,2 40,0 5,0
39,0 1000

35,0
1.200
32,8 0,0 800
30,7

US$/month
29,9 30,0
1.000

%
Median Age
Population

600
25,0 -5,0
800
20,0 400

600 -10,0
15,0 200
400
276 10,0 -15,0
2020 2021 2022 2023E 0
200 Singapore -5,4 7,6 3,6 1,0 2019 2020 2021 2022 2023
100 5,0
66 33 Malaysia -5,6 3,1 8,7 4,3 China 866 968 1.072 1.072 1.119
Thailand -6,1 1,6 2,6 3,5 Malaysia 688 766 784 853 862
0 0,0
China Indonesia Viet Nam Thailand Malaysia Viet Nam 2,9 2,6 8,0 5,8 Thailand 361 367 407 404 427
Indonesia -2,1 3,7 5,3 5,0 Viet Nam 237 252 315 308 329
Population (million) Median Age (years) Philippines -9,6 5,7 7,6 5,7 Indonesia 190 198 203 192 194
Source: World O Meter and Trading Economics, 2023 Source S&P Global, 2023, Trading Economics, 2023 Source Trading Economics, 2023

Regional manufacturing PMI, 8M/2023 Regional industrial production, 6M/2023 Established industrial parks, 2023
65 450
10,0 397
7,2 400
60 5,6
4,7 4,4
5,0 3,6 3,9 3,5 339 342
3,1 350
1,8 2,4 1,8
55 0,5
300
Points

0,0

Number of IPs
Jan Feb Mar Apr May Jun
-1,6 250 226
50 -2,4 -2,4 -2,2
-5,0 -3,3 -3,1
%

-4,8 -4,6 -5,2 200

45
-10,0 -8,1 150

40 100 90
Jan Feb Mar Apr May Jun Jul -15,0
China 49,2 51,6 50 49,5 50,9 50,5 49,2 -14,9
50 31
Malaysia 46,5 48,4 48,8 48,8 47,8 47,7 47,8
Thailand 54,5 54,8 53,1 60,4 58,2 53,2 50,7 -20,0
Viet Nam 47,4 51,2 47,7 46,7 45,3 46,2 48,7 0
China Malaysia Thailand Viet Nam Malaysia Thailand Viet Nam Indonesia Philippines Cambodia
Indonesia 51,3 51,2 51,9 52,7 50,3 52,5 53,3

Source Trading Economics, 2023 Source Trading Economics, 2023 Source Invest Asia Magazine, Sufex Trading, 2023

2 3
 Industrial Market 2023 Industrial Market 2023

Steady
Growth VIET NAM INDUSTRIAL MILESTONES, 2018 - 2023
Viet Nam’s economic recovery
accelerated last year with GDP
growth of 8% on the back of resilient 2018 2019 2020-2021 2022 2023
manufacturing and a robust rebound
in services. According to the World
Bank, in 2022, manufacturing had
a 24.8% share of Viet Nam’s GDP.
• Sale-leaseback • EU Viet Nam FTA • Covid-19 pandemic • economy bounces • Global slowdown affects
Amid a gloomy global economy, Viet
between Unilever and (EVFTA) is signed back with 8% GDP all asset classes
Nam remains in a strong position
Mapletree • More relocations Growth
as the country’s GDP is forecast to
• Relocations & from China • Strong industrial
grow by 5.8% in 2023, according to
• CPTPP is signed expansions due to the • Data Centre enquiries but delayed
the Asia Development Bank (ADB).
trade war continued • Interest in data interest heats up lease contracts
• US-China trade war centre & cold
The global slowdown toward the end
of 2022 and into H1/2023 influenced Growth in Viet Nam • Rental factory and BTS
stoage sectors • LEGO US$1.3
billion investment
• Demand from Chinese
solar panel manufacturers
most real estate asset classes and
lower demand from key export is steady and stable. developers emerge in Binh Duong
markets weighed on manufacturing.
Although industrial developers were Strong fundamentals
hoping for more lease contracts in
H1/2023, strong enquiries and site related to workforce,
visits since Q2/2023 have instilled
greater confidence to finish 2023 on location, FTAs, and
a high note.
economic orientation
will continue to be
its most significant
assets for long-term
growth. Annual GDP growth YoY GDP growth per capita
9,0 45.000
9,0 5.000
8,0 8,0 40.000
8,0 4.475 4.500
7,0 7,1 7,0 35.000 4.086 4.000
6,7 6,8 7,0
6,5 3.756
6,0 6,2 30.000 3.500
6,0 6,0

US$ Million
3.000
5,0 25.000 5,0 2.786
2.715

US$
2.590
%

2.500

%
4,0 20.000 2.389
4,0 2.215
2.052 2.109 2.000
1.907
3,0 2,9 15.000 3,0
2,6 1.500
2,0 10.000 2,0 1.000
1,0 5.000 1,0 500

0,0 0 0,0 0
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023E

Total Registered FDI (Mill US$) Annual GDP Growth YoY (%) Annual GDP Growth GDP per Capita (US$)
YoY (%)

Source GSO, 2023 Source GSO, 2023

4 5
 Industrial Market 2023 Industrial Market 2023

Viet Nam leading export Viet Nam leading export

products, 7M/2023 products, 7M/2023
16%
18%

32% 27%

15% US EU
Electronics & parts 7%

Phones & parts China, PR Hong Kong

Machinery & instruments

7% ASEAN Korea
Textile & sewing
Japan Others
Foo twear

TRADE:
3%
4% Wood & wood pro ducts 10% 13%
12%
4% Transport & equipment

Seafo od
10% 3% 16%
6% Others

Source GSO, July 2023 Source GSO, July 2023

Top export products, 2016 – 7M/2023

Imports and Exports 70,00

60,00

By the end of 2022, phones and their parts had the highest export turnover of US$58 billion, equal to
50,00
a 16% share of the export turnover and rising by 1% YoY. Turnover for this segment increased from only
US$34 billion in 2016. Other high value-added goods such as electronics, computers and their parts

US$ Billion
40,00
reached US$56 billion, up from US$19 billion in 2016; the segment had a 15% share of the export turnover
and rose by 10% YoY. Low value-added industry exports such as textiles had a 10% share while footwear 30,00
only had a 4% share, reflecting a value shift in Viet Nam’s key export products.
20,00

“
10,00

0,00
Computers, Telephones Machinery, Textile, Foo twear Wood and Means of Iron, Steel
In 12M/2022, the US was Viet Nam’s largest export “From 2016 to 2022, the turnover electronical and their instruments, sewing wooden transport
market with a turnover of US$109 billion, or a 29% products & parts accesso ries products products and

share of turnover, increasing by 14% YoY; turnover of electronics and computer parts equipment

from the US increased from US$38 billion in 2016. exports rose by 193% and the 2016 2017 2018 2019 2020 2021 2022 7M/2022 Source GSO, July 2023

China was second with US$58 billion, up from

US$22 billion in 2016; it had a 16% share, increasing
turnover of phone exports
by 3% YoY, and the EU had a turnover of US$47 increased by 68%. This reflects Viet Top export markets, 2016 – 7M/2023
billion with a 13% share, rising by 17% YoY; EU Nam’s move up the value chain as 120,00
export turnover grew from US$34 billion in 2016.
an export-oriented economy for
100,00
high value-added products.”

John Campbell, 80,00

US$ Billion
Associate Director, Head of Industrial Services
60,00

In 7M/2023, export turnover was estimated at US$195 billion, decreasing by -10.6% YoY. Import
40,00
turnover of US$179 billion decreased by -17.1% YoY.

The US remained Viet Nam’s largest export market in 7M/2023 with a turnover of US$53.1 billion. China 20,00
was second at US$30.8 billion. Electronics and computers had an export turnover of US$30.65 billion,
falling by -3% YoY, and phones and their parts had a turnover of US$28.74 billion, decreasing by -18% YoY. 0,00
US China, PR EU ASEAN Korea Japan

2016 2017 2018 2019 2020 2021 2022 7M/2023 Source GSO, July 2023

6 7
 Industrial Market 2023 Industrial Market 2023

Foreign Manufacturing
Direct Investments
Investment Manufacturing and processing investment of US$14 billion had a 69.3%
share of total FDI inflows in 9M/2023. The 735 new projects had newly

(FDI) registered capital of US$8.67 billion, and of the 526 existing projects,
386 had increased capital totalling US$1.24 billion.

Manufacturing and processing FDI, 9M/2023

New Newly Existing Added Projects Contributed Total FDI

projects registered projects capital on with capital capital (US$ billion)
capital existing contributions (US$ billion)
(US$ projects
By 20 September 2023, total registered FDI reached billion) (US$ billion)
US$20.21 billion. There were 2,254 new projects with
registered capital investments of US$10.23 billion, and 934
existing projects had increased capital of US$5.14 billion. 735 8.67 526 4.1 386 1.24 14
Source Savills Industrial Insider, 9M/2023

Northern Viet Nam had the greatest share with US$5 billion or 63% of newly registered manufacturing
FDI, and Southern Viet Nam followed with US$2.03 billion or a 26% share.

Manufacturing and processing had a Foreign Direct Investment (FDI),

69.3% share of the registered capital
with US$14 billion. Real estate came 9M/2023
next with a total investment of about 9,8% Newly registered manufacturing investment by region, 9M/2023
3,6%
US$1.94 billion, accounting for 9.6%
of the total. Finance, banking, and 11%
insurance was third with US$1.54 7,6% 11% Bac Giang had a 16% share of the newly
billion or a 7.6% share.
registered manufacturing FDI, partly
with investments from Fulian Precision
Ha Noi had a 12.5% share with
Technology (Singapore) valued at US$621
US$2.53 billion, Hai Phong had
million and ONGi Green Energy Technology
US$2.21 billion or a 10.9% share, and
at US$140 million. Nghe An followed with a
Ho Chi Minh City had US$1.96 billion 26%
26%
10% share, and Bac Ninh was third with an
or a 9.7% share.
8% share.
Singapore was the largest contributor 63%
9,6%
with a 19.7% share or US$3.98 billion, 63%
followed by China with US$2.92
billion or a 14.5% share, and Japan
69,3%
with US$2.9 billion or a 14.3% share.
Manufacturing & processing Wholesale and retail; repair North
of motor vehicles
Real estate activities Other South
Financial, banking &
insurance activities Central Source Savills Industrial Insider, 9M/2023
Source Ministry of Planning and Investment (MPI), September 2023

8 9
 Industrial Market 2023 Industrial Market 2023

Newly registered manufacturing investment by province, 9M/2023 Largest Manufacturing Investments, 9M/2023

35% Electrical equipment received the greatest newly registered

manufacturing FDI with a 20% share. Computers, electronics, and
30%
30% optical products followed with a 19% share and rubber and plastics
products had a 15% share.
25%

Other 23%
20%
16%
Moto r vehicles 3%
15%

10% Textiles 3%
10% 8% 8%
7%
6%
5% Machinery & equipment 5%
4%
5% 3% 3%
Metals 5%
0%
Bac Nghe AnBac Ninh Binh Quang Binh Hai Long An Dong Ha Nam Other Fabri cated Metal Products 7%
Giang Phuoc Ninh Duong Phong Nai

Source Savills Industrial Insider, 9M/2023

Rubber & Plastics Products 15%

Computer, Electronic & Optical Products 19%

Newly registered manufacturing investment by country, 9M/2023 Electrical Equipment 20%

Source Savills Industrial Insider, 9M/2023 0% 5% 10% 15% 20% 25%

By country, China was the top contributor with a 22% share,

followed by Singapore with a 21% share, and Hong Kong at 17%.

25%
22%
Newly registered manufacturing investment
21%
by region, H1/2023
20%
17%

15% Northern Viet Nam Southern Viet Nam

12%
11%
10%
Computers, electronics, and optical products: Rubber and plastics products had the
5% 5% 19% share. greatest share with 10%.
5% 4%
3%
Electrical equipment 15% share. Fabricated metal products: 4%.

0% Rubber and plastics products: 5% share. Beverages 3%.

r
re

d
ea
g
na

ds
n
an

e
n
on

pa

th

Motor vehicles 4%.

o

n
or
iw
hi

ila
ap

rla
Ja
K

O
C

K
Ta

a
ng

Th

he
h
on

ut
Si

et
H

So

Source Savills Industrial Insider, 9M/2023

10 11
 Industrial Market 2023 Industrial Market 2023

Manufacturing PMI
Largest NEZ manufacturing investments, H1/2023

According to Trading Economics, Viet Nam’s

No. Company Nationality Industry * Investment Industrial Province Land
Manufacturing Purchasing Managers’ Index
capital park size
(US$ mil) (m2) (PMI) increased to 50.5 points in August 2023
from 48.7 in July. This represents the first
growth above the 50-point threshold since
Computers,
Fulian Precision Quang Chau Bac February 2023 as output, new orders, and
1 Singapore Electronics & 621 496,300
Technology IP Giang
Optical Products foreign sales all returned to expansion. Also,
purchasing rose for the first time in six months
Computers,
Goerteck (Hong Nam Son - and was the most pronounced since September
2 Hong Kong Electronics & 280 Bac Ninh 515,276
Kong) Co. Ltd. Hap Linh IP 2022.
Optical Products
Boltun
Corp. & QST Machinery & Bac Tien Quang
3 Taiwan 165 352,700
International Equipment Phong IP Ninh
Corp.
Automotive Amata Song Quang
4 Autoliv Vietnam Sweden 154 90,000
Equipment Khoai IP Ninh
LONGi Green
Energy Solar Panels & Bac
5 China 140 Van Trung IP
Technology Co., Batteries Giang
Ltd.

*Industry as stated on the business licence

Largest SEZ manufacturing investments, H1/2023 Manufacturing PMI, 8M/2023

54,0
No. Company Nationality Industry * Investment Industrial Province Land 52,7 52,5
capital park size
(US$ mil) (m2) 52,0 51,2
50,6 50,5
Shandong 50,0
Rubber & Plastics Binh
1 Haohua Tire Co. China 500 Sikico IP 423,560 48,7
Products Phuoc
Ltd.
47,7

PMI Points
48,0 47,4 47,4
46,4 46,7
Suntory Pepsico 46,2
2 Netherlands Beverages 185 Huu Thanh Long An 200,000
Viet Nam
46,0 45,3
Pandora
Binh
3 Production Denmark Jewellery Products 163 VSIP III 75,000
Duong 44,0
Holdings A/S
Crown Company Binh
4 Singapore Aluminium Products 95 Phu Tan IP 70,150 42,0
Limited Duong

Rising Team
5 Enterprises Hong Kong Textiles 38 TMTC IP Tay Ninh 53,458 40,0
Limited

3
2

23

23

3
2

23
22

3
2

-2

l-2
-2
-2

-2

-2
-2

-2

-2
n-

n-
p-

b-
ov
ug

ug
ct

ar

pr
ec

ay

Ju
Ju
Ja
Se

Fe

M
O

A
D
N

M
A

A
*Industry as stated on the business licence

Source S&P Global, Trading Economics, 2023

12 13
 Industrial Market 2023 Industrial Market 2023

Index of Industrial
Production (IIP)
Viet Nam’s industrial production rose by 2.6% YoY in August 2023, increasing from a 2.3% rise a month
earlier, representing the fourth straight month of growth in industrial output and the steepest pace in the
sequence. Production grew further by 3.5%, up from 2.9% in July. However, in 8M/2023, industrial output
fell by -0.4%.

EVFTA Fulfils
Its Promise
After coming into effect in 2020, the EU-Viet Nam Free Trade Agreement (EVFTA) has supported
increased cooperation between the EU and Viet Nam with a notable hike in trade turnover and foreign
direct investment (FDI) from EU countries.

As of 6M/2023, there were 2,508 EU projects in Viet Nam with a total registered capital of US$28.91
billion, rising from US$18 billion from 1,623 projects in 2016; capital had a compound annual growth rate
(CAGR) of 7%, while projects had a CAGR of 6%.

As of H1/2023, 6% of Viet Nam’s accumulated FDI since 1988 comes from European countries.

The Netherlands is first with 427 projects and an investment of US$14.1 billion, equal
to a 49% share of EU investment in Viet Nam. Key manufacturing investors include
FrieslandCampina, De Heus, Unilever, Philips, AkzoNobel, Shell, and Damen. Dutch
Viet Nam IIP, 8M/2023 suppliers to chip manufacturer ASML Holding visited Viet Nam, Singapore, and Malaysia
in March 2023 to gauge the possibility of setting up new production facilities in Southeast
20,00 Asia (SEA).

15,00
France followed with a 13% share with investment totalling US$3.8 billion. In July 2022,
pharmaceutical giant Sanofi inaugurated a new warehouse at Long Hau Industrial Park
(IP) in Long An Province. Its facility is worth US$75 million, and the company has said it
10,00 will invest a further US$5.7 million to expand its production facilities. It will also invest
US$1.3 million to replace its diesel energy sources with renewable ones.
5,00
2,60
Germany had 456 projects with capital totalling US$2.5 billion for a 9% share. In 2022,
trade between Viet Nam and Germany was approx. US$19.3 billion, of which, Viet Nam
0,00
%

enjoyed a US$12.10 billion trade surplus with Germany. In Q1/2023, B. Braun Group
3
2

23
2

3
2

3
3
2

23
22

announced its Vietnamese operation will hire an additional 1,600 employees, including
-2
-2

2
-2
-2

-2
-2

-2
-2
-2

r-

l-
p-

b-

ay
ar
ec

n
ov
ct
ug

ug
Ju
p

Ju
Ja
Se

Fe

200 in its third factory in southwestern Ha Noi. In 2022, other German manufacturers
M
O

A
D

-5,00
N
A

such as framas, Fuchs, and J. Wagner have also entered or expanded in Vietnam.
-10,00
Denmark had 163 projects registering US$1.97 billion or a 7% share. LEGO drove this
increase with a US$1 billion investment into its toy manufacturing facility. The 44-ha
-15,00 project is being developed in VSIP III in Binh Duong Province and is LEGO’s first factory in
SEA. This significant investment has instilled confidence in Viet Nam from other European
-20,00 manufacturers.

Source FX Empire, Trading Economics, 2023

14 15
 Industrial Market 2023 Industrial Market 2023

China +1 &
EU Investment capital in Viet Nam 2016 – 6M/2023

Catching The
3.000 35,00

30,00
2.500 28,91
27,80

2.000

20,80
21,78 22,20 22,24
25,00

Electronics Wave

US$ Billion
20,00
Projects

18,84
1.500 18,00

15,00

1.000
Viet Nam has been fighting its way up the value

“
10,00 chain for years, and its efforts have been rewarded
in recent years given the US-China Trade War in
500
5,00
2018 and the Covid-19 Pandemic in 2020 and 2022,
which sped up the diversification and relocation of
multinational electronics manufacturers outside of Viet Nam is a very important market
0
2016 2017 2018 2019 2020 2021 2022 6M/2023
0,00
China to SEA. and production area for Apple. There
Number of Projects US$ Billion is significant potential for cooperation
This migration has spurred FDI and greater
Source MPI, Savills Viet Nam, 2023
integration with global markets. However, Viet Nam given the outstanding growth in
must be prepared to accommodate these high production scale and export value of
Free trade agreements summary, 2023 value-added investments by improving its labour Apple products in Viet Nam during
force and infrastructure while facilitating SMEs and
supporting industries. this challenging period. This affirms
Region Viet Nam Malaysia Thailand Philippines Indonesia
the group’s trust in the Vietnamese
ASEAN ✓ ✓ ✓ ✓ ✓ Thailand, Malaysia, and Indonesia are also market. Apple is very interested in
increasingly competitive. Panasonic recently
moved its automated equipment production bases
Viet Nam’s clean energy strategy and
ASEAN-China ✓ ✓ ✓ ✓ ✓
from China and Japan to Thailand. wants its suppliers in Viet Nam to
India ✓ ✓ ✓ ✓ ✓ gain access to clean energy. Apple
The importance of technology transfer from wants to engage in HR development
Korea ✓ ✓ ✓ ✓ ✓ foreign investors can’t be understated in Viet
Nam’s up the value chain, especially with regard to and training, especially for software
Japan ✓ ✓ ✓ ✓ ✓ upskilling the labor force. development.
CPTPP ✓ ✓ X X X In September 2023, Apple finalised the relocation
of 11 of its audio device production facilities to Viet
Nick Ammann,
Vice President of Global Policy at Apple
EU ✓ O O O O Nam, marking a significant shift in the company’s
global supply chain strategy. Currently, Apple’s
US X X X X X suppliers, such as Lux Share, Foxconn, Compal,
and GoerTek, operate 32 factories in Viet Nam,
creating jobs for 160,000 workers producing and
in negotiations Source KPMG, Electronics Manufacturing in Viet Nam, May 2023
assembling components for Apple products. Investments from Samsung continue with
the development of the largest research and
By 2025, estimates by JPMorgan expect Apple to development centre in SEA, valued at US$220

“Viet Nam has entered 15 FTAs and is negotiating three more.

The country is involved in more trade agreements than most
relocate 65% of AirPod 20% of iPad, 20% of Apple
Watch, and 5% of MacBook manufacturing to Viet
Nam.

Intel is expanding the second phase of its chip

million in Ha Noi. US companies Boeing, Google,
and Walmart have announced plans to extend their
supplier networks and manufacturing bases in Viet
Nam following research into the market. HP is also
considering Viet Nam as a potential destination
regional counterparts, which is impressive considering ASEAN is verification plant in Ho Chi Minh City with a for relocating laptop production, with plans set to
one of the most globally integrated regions. sizeable investment amounting to US$4 billion. commence in 2024.

John Campbell,
Associate Director, Head of Industrial Services

16 17
 Industrial Market 2023 Industrial Market 2023

Production moving or planning to move

from China to Viet Nam Northern Economic
No.

1.
Company

Inventec
Status

In Progress
Products

Apple Parts Supplier

Location

Taiwan Zone (NEZ)

2. Wistron In Progress ODM Computer Parts Taiwan

3. Pegatron In Progress Apple Parts Supplier Taiwan

4. Apple In Progress AirPods US

5. Qisda In Progress EMS Provider Taiwan

6. Dell Planning Computers US

7. Google Planning Smartphones US

8. Microsoft Planning Computers US

9. Lenovo Planning Computers Hong Kong

10. Nintendo Planning
Industrial Supply & Performance
In 2023, there are 397 established IPs with a
total land area of 122,900 ha. Of which, 292 are
operational with a total land area of over 87,100 ha
Another 106 IPs are under construction with a total
land area of 35,700 ha.
IPs nationwide have a high occupancy rate of over
80%, with the key Northern provinces reaching
83% and key Southern provinces reaching 91%.
Game Consoles Japan The Northern Economic Zone (NEZ)
comprises Ha Noi, Bac Ninh, Bac Giang,
Source: KPMG, Electronics Manufacturing in Viet Nam, May 2023
Hung Yen, Vinh Phuc, Hai Phong, and
Hai Duong provinces. The NEZ has well-
developed transportation networks,
prime industrial land supported by new
infrastructure development; proximity
Source: e.vnexpress.net
and investment from China; and a
focus on heavy industry, electronics,
automotive and large-scale projects.
Significant NEZ industrial players,
H1/2023
No. Area Companies

Vietnam Singapore Industrial Park (VSIP), Viglacera, Kinh

1. Key master IP developers Bach City Corporation, TNI Holdings Limited, and Deep C
Industrial Zones.

BW Industrial Development JSC (BWID), KTG Industrial

Factory and warehouse
2. JSC, Gaw NP Industrial, An Phat, Linfox, FM Logistics, and
developers
Logis Valley.

Samsung, LG Electronics, Foxconn, Canon, Hyundai, Honda,

3. Notable occupiers
Vinfast.

NEZ tenant mix

Electronics & Automotive. Machinery & Solar related

computers. equipment. manufacturing.

18 19
 Industrial Market 2023 Industrial Market 2023

NEZ IP Map

Source: vinfastauto.com

Occupancies steadily rise,

Source Savills Viet Nam, 2023
land prices reach new heights
Industrial park occupancy in the NEZ in H1/2023
was 83%, increasing from 81% year-on-year. Land
lease average price reached US$138/m2/one-off
term, rising from US$102/m2/one-off term last year.

NEZ IP Supply & Performance, H1/2023 Bac Ninh had the greatest land lease increase of
48% YoY to US$156/m2/one-off term on the back
of revived interest from electronics players and
their suppliers diversifying out of China. Hung Yen
increased by 45% YoY to US$132/m2/one-off term,
NEZ IP summary, H1/2023 Hai Duong rose by 33% to US$101/m2/one-off term
and Hai Phong increased by 28% to US$129/m2/
one-off term.

“
Occupancy in Bac Ninh dropped to 80% from 91%

12,000 68 83% last year with new supply available in Gia Binh IP
(277 ha), Thuan Thanh (231 ha), and VSIP Bac Ninh
II (137 ha). Hai Duong had a -5% decrease to 81%.
Total leasable area (ha) Total projects IP occupancy Rents are starting to exceed double
Conversely, Hai Phong occupancy rose by 13% YoY
to 76% and Hung Yen reached occupancy of 88% digits, which diminishes the NEZ’s
with a 14% YoY improvement.
competitive edge over the SEZ.
Higher land prices might challenge

2.4% 138 30% incoming electronics, automotive

players, and solar manufacturers that
Occupancy growth YoY US$/m2 land price Land price growth YoY want large but affordable land banks.
John Campbell,
Associate Director, Head of Industrial Services

20 21
 Industrial Market 2023 Industrial Market 2023

NEZ IP supply & NEZ RBF/RBW Map

performance, H1/2023

ha US$/m2/term
4500 180
4000 160
3500 140
3000 120
2500 100
2000 80
1500 60
1000 40
500 20
0 0
Bac Ninh Hai Phong Hung Yen Hai Duong Bac Giang Ha Noi

Occupied Vacant Avg Land price Source Savills Viet Nam, 2023

NEZ Infrastructure
Source Savills Viet Nam, 2023

NEZ Ready-Built Supply and Performance

Ready-built factory and warehouse occupancy decreased to 83% from 88% in H1/2023 with new supply
launching in Hai Phong and Bac Ninh. Stock reached 3.5 million m2 net leasable area (NLA) with around
618,000 m2 NLA vacant. Rent averaged US$4.8/m2/month (excl. VAT) in H1/2023.

NEZ RBF/RBW summary, H1/2023

3.5 million 618,000

Source Savills Viet Nam, 2023 Total leasable area (m2) Vacant area (m2)

The NEZ has a highly developed road network, which enhances connectivity between Ha Noi and pivotal
industrial provinces such as Bac Ninh, Hung Yen, Bac Giang, Hai Duong, Hai Phong, and Quang Ninh.

The region has three primary ports, Hai Phong Port, Lac Huyen Deep Sea Port, and Cai Lan Port, which
underpin industrial competitiveness with links to international markets, particularly South Korea, China,
4.8 83%
and Taiwan. US$/m2/month, avg. rent Occupancy

22 23
 Industrial Market 2023 Industrial Market 2023

NEZ RBF/RBW stock & rent,

H1/2023
1.400.000

1.200.000 5,0
5,1

5,0
Southern Economic
1.000.000 4,9 4,9 4,9

Zone (SEZ)

US$/m2/month
NLA (m2)
800.000 4,8

600.000 4,7 4,7

400.000 4,6

200.000 4,5 4,5

0 4,4
Bac Ninh Hai Phong Hung Yen Hai Duong Ha Noi

Leased (m2) Vacant (m2) Average rent

Source Savills Viet Nam, 2023

NEZ RBF/RBW rent range, 8,0

H1/2023 7,0
The Southern Economic Zone (SEZ)
6,0 comprises Ho Chi Minh City, Binh Duong,
Dong Nai, Long An, Tay Ninh, and
US$/m2/month

5,0 5,0 4,9 4,9

4,5
4,7 Ba Ria – Vung Tau (BRVT) provinces.
4,0 Advantages include its proximity to
HCMC – Viet Nam’s economic centre,
3,0
Cat Lai Port, a skilled labour supply
2,0 from good educational institutions, and
diverse investment opportunities.
1,0

0,0
Bac Ninh Hai Phong Hung Yen Hai Duong Ha Noi

Minimum Rent Max Rent Average Rent Significant SEZ industrial players,
Source Savills Viet Nam, 2023
H1/2023

No. Area Companies

NEZ IP supply & performance,
H1/2023 0,9%
1. Key master IP developers
Vietnam Singapore Industrial Park (VSIP), Sonadezi, Saigon VRG, Tin
Nghia Corporation, Idico, and ITA
3,2%

Factory and warehouse BWID JSC, KTG Industrial JSC, Boustead Projects, Kizuna JSC,
2.
developers Daiwahouse Co. Ltd., JSC, GT-Industrial, and IP Vietnam

3,4%
11,8% Lego, Suntory PepsiCo, Intel, Jabil, P&G, Unilever, Coca-Cola, CJ
3. Notable occupiers
Group, Kumho Tires

SEZ tenant mix

7,7%

Bac Ninh Hai Phong Hung Yen Hai Duong Ha Noi

Source Savills Viet Nam, 2023

Rubber & plastic Food & beverage Building Textiles &
products. processing. materials. apparel.

24 25
 Industrial Market 2023 Industrial Market 2023

SEZ IP Map

Source: intel.com

Occupancy increases and land

Source Savills Viet Nam, 2023
prices continue to surge
SEZ occupancy reached 92% in H1/2023, increasing
from 84% in H1/2022. Land cost US$174/m2/one-
off term, higher than US$152/ m2/one-off term
last year.

SEZ IP Supply & Performance, H1/2023 In H1/2023, BRVT had the largest land price
increase of 35% YoY to US$128/ m2/one-off term,
partly with increases at Phu My 3 IP, the most
expensive IP in the province. Long An had a 23%
YoY increase to US$191/ m2/one-off term, and
SEZ IP summary, H1/2023 Dong Nai rose by 18% YoY to US$188/ m2/one-off
term. With almost no available land in Binh Duong
and HCMC, there were no increases.

“
Occupancy in Long An rose to 85% from 60% last

24,883 122 92% year. BRVT occupancy reached 78% from 72% last
year. Binh Duong occupancy remained high at 99%
and Dong Nai was stable at 96%. Much anticipated
Total leasable area (ha) Total projects IP occupancy
projects in Dong Nai are expected to launch in
Asking prices approaching
the next couple of years such as Long Duc 3 from US$200/m2/one-off term challenge
Sojitz. Apart from VSIP III, no new notable projects developers and tenants. Given limited
are expected in Binh Duong next year. stock and high land prices, some

10% 174 15% of the first multilevel factories and

warehouses are being built outside
of HCMC.
Occupancy growth YoY US$/m2 land price Land price growth YoY

John Campbell,
Associate Director, Head of Industrial Services

26 27
 Industrial Market 2023 Industrial Market 2023

SEZ RBF/RBW Map

SEZ IP stock &
performance, H1/2023

ha US$/m2/term
8000 300

7000
250
6000
200
5000

4000 150

3000
100
2000
50
1000

0 0
Binh Duong Dong Nai Ba Ria-Vung Tau Long An Ho Chi Minh City

Occupied Vacant Avg Land price Source Savills Viet Nam, 2023

SEZ Infrastructure

Source Savills Viet Nam, 2023

SEZ Ready-Built Supply and Performance

Ready-built factory and warehouse occupancy softened to 83% from 88% last year with new supply in
Long An. Stock reached 8 million m2 NLA with 1.4 million m2 NLA vacant. Rent averaged US$4.4/m2/
month (excl. VAT) in H1/2023.

SEZ RBF/RBW summary, H1/2023

Source Savills Viet Nam, 2023 8 million 1.4 million

Total leasable area (m2) Vacant area (m2)
Unlike Ha Noi, HCMC has a commercial port, Cat Lai. However, HCMC’s long-established supply chain
of manufacturers has resulted in traffic congestion surrounding the city. Fortunately, as Cai Mep Thi Vai
Port in BRVT reaches its potential it will accommodate large container vessels, serve as a gateway to
international trade, and ease the congestion near HCMC. The SEZ patiently awaits the upcoming Ring

4.4 83%
Road 3 (expected completion in 2026) and Ring Road 4 (expected completion in 2028), in addition to
the Ben Luc – Long Thanh Expressway (expected completion in 2025). On 31 August 2023, three main
bidding packages at Long Thanh International Airport in Dong Nai and Terminal 3 of Tan Son Nhat
International Airport in HCMC broke ground. Long Thanh International Airport will have three phases US$/m2/month, avg. rent Occupancy
comprising 5,580 ha and a total investment of US$14 billion. All phases of the mega project are estimated
to be fully complete by 2050. Terminal 3 of Tan Son Nhat International Airport is estimated to cost
approximately US$451 million and is estimated to go live in H2/2025.

28 29
 Industrial Market 2023 Industrial Market 2023

SEZ RBF/RBW stock & rent,

H1/2023
3.500.000

3.000.000

2.500.000 4,3
4,8
4,2
5,1
6,0

5,0
New

US$/m2/month
4,0

Logistics
2.000.000
3,0 3,0
1.500.000
2,0
1.000.000

500.000 1,0

0
Binh Duong Dong Nai Long An Ho Chi Minh
City
Ba Ria-Vung
Tau
0,0
Landscape
Leased Vacant (m2) Average rent
Source Savills Viet Nam, 2023

SEZ RBF/RBW minimum 14

and maximum rents, H1/2023 12

10
US$/m2/month

6
4,8 5,1
4 4,3 4,2
3,0 Viet Nam has one of the fastest growing logistics sectors globally. The
2
industry has grown rapidly along with the economy, trade, high value-
0
Binh Duong Dong Nai Long An Ho Chi Minh City Ba Ria-Vung Tau
added manufacturing, and a growing middle class driving the rise of
Minimum Rent Max Rent Average Rent e-commerce.
Source Savills Viet Nam, 2023
According to the Viet Nam Logistics Business Association (VLBA), Viet Nam’s logistics industry grew
by 15% in 2022. Total logistics expenditure in Viet Nam was equivalent to over 20% of GDP, among the
highest logistics expenditures in the world due to the existing inefficiencies. Most (75%) of Viet Nam’s
freight volume passes through just six of its 75 seaports.

NEZ IP supply & performance,

H1/2023
2,2% Logistics Limitations
7,3%

12,6%
20,7%
01
Fragmentation
02 03
Technology Infrastructure
04
Administration
The sector is The low adoption Although Viet Nam Complicated and
split into many of digitalisation invests heavily in logistics cumbersome customs
SMEs operating and technical infrastructure, it falls short procedures and strict
18,9%
independently; the expertise means of international standards licensing requirements
lack of coordination service standards as it mainly focuses on have slowed logistics
and standardisation don’t reach their road networks. Road development.
Binh Duong Dong Nai Long An Ho Chi Minh City Ba Ria-Vung Tau increases costs. full potential; poor transport has a 74% share
traceability, inventory of transport, while export-
Source Savills Viet Nam, 2023 management, and oriented enterprises have
delayed deliveries. significant demand for
sea transport.

30 31
 Industrial Market 2023 Industrial Market 2023

Logistics Performance
Viet Nam’s rank in the World Bank’s
Logistics Performance Index
(LPI), 2023 Mergers & Acquisitions
Logistics Performance Index (LPI) fell
5 140
four steps, ranking 43rd (out of 160 4,5 4,3
recorded countries), disappointing 4
4
3,7
120

compared to its promising ranking of

3,6 3,5
3,3 3,3 100
In late May, Gemadept sold its entire 84.7% During the same month PSA Cargo
3,5
39th place in 2018. However, its LPI 3 stake in Nam Hai Dinh Vu Port to a group Solution Vietnam Investments purchased

LPI Score
3

LPI Rank
score increased to 3.3 points, up from 2,5
2,4
80
of investors, including Vietnam Container approximately 24.5 million shares of
3.27 points in 2018 and the highest 2
60 Corporation (Viconship). The deal resulted in Southern Logistics JSC (Sotrans – STG),
since the index started in 2007. Viet 1,5 40
Viconship becoming the largest port company equivalent to approximately 25% of charter
Nam is in the Top 5 ASEAN countries 1 in Hai Phong with a 30% market share. capital at the price of nearly US$55 million.
20
after Singapore, Malaysia, and 0,5
0 0
Thailand and ties with the Philippines.

d
g

na

s
re

ia

a
ia
am

di
n
on

es
o

in
hi

ila
ay

bo
N
ap

on
K

pp
C

a
al

am
ng

Th

ie

d
M

ili
Logistics capacity, delivery time,

on

In
V

Ph
Si

C
H
traceability and the quality of logistics LPI Score LPI Rank Source World Bank, 2023
services enterprise services were the
main factors determining its downfall
in the 2023 rankings.

Opportunities E-Commerce
The fact that the sector is still highly fragmented Logistics investment
presents attractive investment opportunities
for private equity firms and investors. The rapid strategies:
growth of the logistics industry is sustainable due
to continuous expansion in the manufacturing
sector driven by high value-added production and
a rising middle-class population. Invest

“
Viet Nam is one of the fastest-
in leading logistics companies to develop an
integrated platform that can provide cost
advantages to customers. 01 Retail e-commerce revenue jumped from US$8 billion in 2018 to US$16.4
billion in 2022 and is forecast to increase by 25% to US$20 billion by the
year’s end, according to a report on the Vietnam E-Business Index (EBI)
2023 conducted by the Vietnam E-commerce Association (Vecom).
growing countries in terms of logistics
services. However, fragmentation and Identify The report is based on three sub-indexes, including Most (65%) of businesses utilise social networks,
decentralisation remain hindrances.
This presents attractive opportunities
for investment funds in private
companies and other investors who
specific assets requiring capital for upgrades
or reusability and drive growth by improving
operational efficiency. 02 IT human resources and infrastructure, B2C
e-commerce, and B2B e-commerce.

The EBI 2023 averages 19.24 points, compared to

20.37 points last year, with Ha Noi and HCMC being
can help domestic enterprises increase the dominant localities. HCMC garnered 89.2 points
and continued to top the rankings in 2023. Ha Noi
their revenue and profit by applying ranked second with 85.7 points, followed by Da
the best international practices.” Engage Nang with 39.5 points.
which prove more effective than selling on their
websites, applications, or e-commerce platforms.
TikTok Shop has garnered significant popularity
despite only launching in Q2/2O22. According to
Metric Data Science, revenue from Viet Nam’s top
four e-commerce platforms (Shopee, Lazada, Tiki,
and Sendo) and Tiktok Shop in Q1/2023 reached
US$1.6 billion. Big C, one of Viet Nam’s largest
retailers, now allows its customers to place orders

Michael Kokalari,
Chief Economist at VinaCapital
in buying, selling, and mergers, and apply best
practices such as digitalisation along with
capital injection. 03 While growing rapidly, e-commerce is yet to reach
its full potential. The sector only has an 8.5%
share of total retail sales of consumer goods and
services.
through Zalo and have their purchases delivered to
their homes.

32 33
 Industrial Market 2023 Industrial Market 2023

Market share of major 1.200

1.015
e-commerce platforms, 1.000

Q1/2023
800

Millions
600

400
290 308
247

200

Data Centres
55 42 35
3 2 0,3
0
Shopee Lazada Tiktok Shop Tiki Sendo
Revenue Quantity of products (millions)
US$ (millions)
Source Metric, 2023

10.646
Viet Nam Overview
Sellers generating 16.179
revenue, Q1/2023 As data demand increase across the world, previously underserved DC markets are quickly establishing a
68.411
presence on the main stage. Viet Nam’s cloud and data centre industry is one of the top ten fastest growing
in the world driven by the digitalisation of the local SME sector, a young and digitally literate population,
the arrival of 5G, the need for self-sufficiency in digital infrastructure, and data localisation laws.

211.609
The Government aims for Viet Nam to become
a key digital hub. Viet Nam’s data centre
105.921
market is forecast to grow to US$1.04 billion
by 2028, up from US$561 million in 2022 and
representing a CAGR of 10.7%. According to
Viettel IDC, accelerating the commercialisation of
5G technology is essential to meet Industry 4.0
movements like AI, big data, and IoT.
Shopee Lazada Tiktok Shop Tiki Sendo
Source Metric, 2023 Rapid growth brings risks and responsibilities to
ensure data privacy, cybersecurity, sustainable
resource consumption, reliability, and quality of
service. This means Viet Nam must address the
challenges and opportunities for cloud, colocation,
enterprise and edge computing and the roles these
can play in accelerating the country’s digital future.
Top e-commerce 90
The Government has a Digital Transformation
Program, which aims to transfer 50% of business
to digital platforms by 2025. Viet Nam’s
5G connectivity supports edge data centre
deployment and offers last-mile connectivity
and lower latency services. In February 2022,
the Ministry of Information and Communication
announced its research plans for developing 6G
technology to meet the demand from the fastest-
growing technology sectors.
The country has five existing submarine cables
connecting to APAC and EMEA countries and the
US. Two upcoming cables expected between 2023
and 2024 include Asia Direct Cable (ADC) and
Southeast Asia-Japan Cable 2 (SJC2).

79
platforms- preference rate, 80

Q1/2023 70
Top 10 emerging global 350

59
60
data centre markets, 2023 300 290

50 250
%

209

Data Centres
40 38
200
33
153
30 26 142
25 150
116
20 103
15 100
69
10 55
46
50 28
0
Shopee Lazada Facebo ok Tiki Sendo TikTok Zalo 0
India Indonesia Australi a Japan Brazil Malaysia Hong Vietnam South Singapo re
Kong Afri ca
Source Decision Lab, 2023 Source Data Center Magazine, Feb 2023

34 35
 Industrial Market 2023 Industrial Market 2023

Vendor Landscape VIET NAM

DATA CENTRE
Real Estate
Since Q1/2021, enquiries from foreign providers include HP, Dell, Cisco
QUICK FACTS
data centre operators looking for
locations and potential joint-venture
Systems, Fujitsu, Hitachi, Huawei,
IBM, Lenovo, NetApp, NEC Corp, and Considerations
28
(JV) partners have increased on the Oracle.
back of hyperscalers announcing
interest in Viet Nam. In August New entrants in the segment in Viet
2022, Amazon Web Services (AWS) Nam include Data Center First, Edge
announced the launch of edge data Centres, Infracrowd Capital, and Total Projects
centres in Ha Noi and Ho Chi Minh Worldwide DC Solutions. Existing Trigger Shy

“
City. operators are expanding their

45
presence by investing in new facilities The latest draft of the Telecommunications
Currently, most of the players in and expanding existing facilities. Law from the Ministry of Information and
Vietnam’s data centre segment are Communications was released on 31 August 2023. Foreign investors prefer joint
local telecommunications companies Local vendors have low power Key items outlined in the draft law include revisions
such as Viettel IDC, NTT Global Data requirements of 1 - 5MW, while
MW partnerships given guarantees of
on foreign ownership limitations and additions to
Centers, FTP Telecom, CMC Telecom, foreign players require approximately the license requirements in the current regulations. transparency, specialisation, and

44
HTC Telecom International (ECODC), 15 - 20MW. access to land, which is a particular
VNPT, and VNTT. IT Infrastructure According to DFDL Viet Nam, the existing and struggle as vacancies are limited. To
draft laws do not detail any specific licensing
or permits applicable to data centres providing
attract significant foreign data centre
Service players and Hyperscalers, Viet Nam
colocation services, but might be understood as,
Revenue by segment, 2018 - 2024F Providers “services providing spaces in a data centre to a should consider its cyber laws and the
service user and allowing the service user to design
land available for these projects.

03
2,5 and install their servers and/or other storage
equipment.”
2
0,2
John Campbell,
0,16 Network Associate Director, Head of Industrial Services
0,15
1,5 0,13 0,37
Fabrics
US$ Billion

0,28 0,3
0,26

“
1

0,5

0
1,22 1,24 1,26
1,35

17
Colocation The current draft law adds much
2018 2020 2022 2024F Providers needed clarity for foreign investment
Network Infrastructure Sto rage Servers Source Statista 2021
in data centers. However, there is

Server and storage providers (%), 2023 Source

13
79
Connectivity
still some uncertainty on the exact
licensing and permissions required
to conduct colocation services
including sub-leasing of rack space
Other
30 Providers
to third party end users. We view

12
Cisco
2 that additional clarity to the legal
2
framework would encourage more
Dell
21 foreign direct investment in the data
28
Cloud & Hosting center market.
Providers
Source Cloudescene, 2022

64
HP
40
JPaul D. Volodarsky,
0 10 20

Blade Server (%)

30
%
40

Server & Sto rage (%)

50 60 70

28
Managed Service
Partner & Head of Regional Real Estate Practice,
DFDL Viet Nam

Source Viet Nam DC Market - Investment Analysis & Growth Opportunities 2023-2028 Providers

36 37
 Industrial Market 2023 Industrial Market 2023
Data Centre Infrastructure
Intermodal transport network links will require
ongoing investment if Viet Nam is to attract
Case Studies
higher-value manufacturing and logistic projects.
This is particularly important near tier 1 and tier 2
provinces, industrial and economic zones,
and ports.
The quality throughput of all transport
infrastructure in Viet Nam remains lower
than regional peers. Although transportation
infrastructure is expanding rapidly, development
falls short of national economic and social
NTT Global Data Centre growth. Rapid growth in urban population and
Challenges
freight transportation are the primary drivers of
infrastructure needs, whilst the capacity of the port
and seaports hasn’t reached its potential.
6MW
Skilled Labor Supply
As Viet Nam’s focus turns to attracting high value-
added industries and boosting productivity to
match regional peers, the demand for skilled labour
increases.
To effectively accommodate higher-value projects
the country must continue investing in education,
notably IT, mathematics, and the sciences.
Although labour costs in Viet Nam are one-third of
those in China, so is productivity.
By 2030, the Government aims to:
• Improve digital transformation in education and
training.
Source NTT • Diversify methods of organising online teaching
and learning activities.
Project Joint-Venture • Deploy strategies and master plans involving
vocational education.
Investor NTT Global Data Center • Improve research, and development, and attract
human resources for science & technology.
Local Partner QD.Tek • Foster an innovative environment for start-ups
throughout the country.
Address Saigon Hi-Tech Park (STHP), District 9, HCMC
Operation Date H2/2024
IRC & Company Establishment
Building 05 levels Delays
Gross GFA 3,100 m2 As Viet Nam prefers clean, high-tech, and
environmentally friendly industries, the authorities
Racks 1,200
have become stricter when reviewing investment
applications and dossiers, extending the time it
IT Power 6MW
takes tenants and investors to start operations.
Estimated Investment US$56 million Leading industrial rental developer, BW Industrial
Development JSC (BWID), stated that the
investment process in Viet Nam in 2023 can take
up to six months compared to three or four months
in 2019. This duration includes the time from
selecting a location to the actual commencement
of operations.
38
New Fire Safety Regulations -
A Burning Issue for Investors
New, strict firefighting regulations came into
place at the end of 2022, which have hindered
industrial developers, manufacturers, and
logistics companies. Significant foreign investors
have been struggling to obtain the correct
certifications and several projects have been
delayed. However, the Government is updating
procedures to remove the obstacles in obtaining
the correct certifications. In addition to cost, the
new regulations can slow speed to market, which
should be considered. Therefore, to avoid costly
delays, new manufacturing and logistics tenants
are turning to high-quality factories or warehouses
from reputable developers that have the correct
firefighting certifications.
New CIT Rates
The OECD’s newly approved Global Minimum Tax
Rate (GMT) will go into effect in January 2024 137
countries covering 90% of the global economy
signed a deal to enforce a GTM rate of 15%,
including Viet Nam.
While it would reinforce Viet Nam’s reputation
as an integrated, responsible, and dependable
member of the international community and stands
to gain more state budget revenue from taxing
previously untaxed profits of MNEs, it poses a
sizeable challenge for the country. It may adversely
affect Viet Nam’s ability to attract FDI. While the
country’s current standard Corporate Income Tax
(CIT) rate is 20%, it offers preferential tax schemes
to entice MNCs and FDI.
EY Viet Nam stated that shifting tax incentives
based on profits to costs is being considered by
many countries. Tax offsets and monetary support
initiatives have been suggested as a possible way
to make Viet Nam a more attractive investment
destination, but the country would likely need
to make adjustments to ensure these incentives
comply with OECD rules and regulations.
Introducing policies on global minimum tax related
to infrastructure, worker housing, and social
insurance is another idea being considered by the
General Department of
Taxation but states such policies would need
to ensure they don’t violate GMT rules and
international commitments and practices.
If the new GMT is to be implemented in January
2024, Viet Nam must develop a clear action plan
and timeline for implementation.
39
 Industrial Market 2023 Industrial Market 2023

Trends
Solar Manufacturers
Moving to the North

Three of the top five manufacturing projects in

the NEZ in 2022 were related to solar production.
Trina Solar was the largest investor with a US$275
million project in Yen Binh IP, Thai Nguyen
Province. Investors are largely from China, Hong
Kong, and Singapore.

While the South has notable solar manufacturers

like First Solar in Dong Nam IP, HCMC, the majority
of solar panel and battery cell producers have
relocated to the NEZ in recent years. Of the 30
manufacturers of solar products throughout the
country, 77% of which are in the NEZ and only 23%
in the SEZ.
In H1/2023, US solar module manufacturer
Thornova Solar started production at its modern
plant with an annual capacity of 1 gigawatt in Que
Vo IP, Bac Ninh Province.

In H1/2023, Vietnamese private conglomerate

Damsan’s AD Green inaugurated a US$45
million, 3-gigawatt factory in northern Vie Nnam,
manufacturing solar panels for domestic and
overseas markets. The facility covers almost 8 ha at
the An Ninh Industrial Complex in Tien Hai District,
Thai Binh Province.

Source VSIP
Largest solar product manufacturing
investments, 2022
Rise of the Mekong Delta No. Company Investment Nationality Province Approx. Land Size
(US$ million) (m2)
2022 and 2023 witnessed important milestones for the growth of the Mekong
1. Trina Solar 275,000,000 Singapore Thai Nguyen 107,000
Delta’s industrial sector. Renowned developer VSIP broke ground on 09
September 2023 at its first project in Can Tho. The 900-ha project will be an
integrated industrial, high-tech, and service centre and residential area. Phase 1 2. ET Solar HK 150,000,000 Hong Kong Thai Binh 67,907
will span 293.7 ha, with an investment capital of more than US$152 million. VSIP
also invested in building a US$7.4 million road to connect the project to National
Highway 80 in preparation for construction. 3. JA Solar 99,000 Hong Kong Bac Giang 201,573

Rental warehouse developer SLP started construction on its 29,000 m2 SLP Growatt
4. 10,000 Hong Kong Hai Phong 17,000
Energy
Park Binh Minh warehouse project in Vinh Long Province in October 2022. SLP
Chairman, Kent Yang, sees the modern logistics warehouse project as extremely
necessary in easing the overload of Ho Chi Minh City’s logistics system and 5. Huishin Group 350,000 China BRVT 8,000
facilitating the import and delivery of goods. Vinh Long Province will also Source MPI, Savills Viet Nam, 2023
welcome Gilimex Vinh Long IP, which has started construction preparations for
the first phase of the 400-ha project. Supporting Industries & SMEs
Sustainable growth in the industrial sector requires supporting industries, SMEs,
According to the 2021 to 2030 development with a vision to 2050, the Mekong
and improved supply chain integration. Viet Nam currently has 2,000 enterprises
Delta will have six expressways spanning 1,166 km.
producing spare parts and accessories, with 300 of them involved in supply chains.
The Government has instituted tax breaks and incentives for supporting industries
looking to establish themselves in Viet Nam. For example, Decree 57 offers incentives
to supporting industries consisting of a four-year CIT exemption to a 10% preferential
tax rate for the first 15 years on income stemming from new projects in the field.

40 41
 Industrial Market 2023 Industrial Market 2023

Sustainable Industrial Development &

Eco-Industrial Parks
Viet Nam aims to become a developed country
by 2045 and achieve net zero emissions by
2050, an ambitious and challenging goal. The
development of eco-industrial parks and closed
circular production chains will support the
realisation of the goal. Eco-IPs aim to increase the
transfer, deployment, and diffusion of clean and
low carbon technologies, and minimise greenhouse
gas emissions and water pollutants in addition to
improving water efficiency and sound management
of chemicals. However, significant investment is
required.

Shinec JSC is taking a proactive approach to

this issue. Over 40% of the land area is used for
parks, trees, public areas, and infrastructure. It also
measures and monitors all wastewater, exhaust
gas, dust, and waste 24/7 to ensure a clean and

OUTLOOK
green ecosystem. According to its Chairman,
Pham Hong Diep, the costs of investing in Eco-
IPs are 30% greater than that of standard IPs.
However, the ambitious developer aims to achieve
net zero emissions by 2030 and inspire industrial
developers nationwide.
*Nam Cau Kien IP, Thuy Nguyen District, Hai Phong Source nhandan.vn

Optimising Logistics Supply Chains

After a turbulent first half, Viet Nam shows steady and stable growth as its key drivers
Managing the supply chain in Viet Nam requires This massive shift to e-commerce encouraged
companies to continuously improve their organisations to reconfigure their supply chain and remain its most significant asset in the long term, including its young and dynamic
processes, human resources, and technology fulfilment strategies to keep up with the demand. workforce, competitive labour costs, export-oriented economy, stable business
applications to improve product and service More companies are trying to improve their environment, geographical location, and progressive participation in many FTAs.
quality. Businesses should prioritise high-speed supply chains by streamlining processes, adopting
operations through automation, as it enables sustainable and innovative practices to reduce
timely, low-cost fulfilment of orders through operational costs, and embracing automation and
increased operational efficiencies, higher storage digital integration to increase efficiency. Beyond
density, and greater ability to deal with spikes this, it is vital for companies to continually monitor The tide is turning in H2/2023. Upticks in no longer tied to 50-year land leases as was the
in demand. TikiNOW Smart Logistics already and adapt to market changes, in addition to manufacturing PMI and industrial production show norm. This drives heavy competition between
deployed robotic technology to execute tasks developing strategic partnerships, particularly with promise, and growing enquiries and site visits investors with more ready-built stock launching
under supervision. Lazada ELogistics (LEL) has two third-player logistics (3PL) providers who can help from multinational manufacturing, logistics and in key provinces. To attract the best companies,
sorting centres in Ha Noi and HCMC, operational them achieve their supply chain goals. e-commerce tenants give hope to developers. IP and ready-built developers should focus on
24/7, using automation to decrease the rate of Despite the global headwinds, Viet Nam is value-added services and incentives beyond price
sorting mistakes to zero. expected to resume rapid economic growth and rents such as market entry services, HR and
over the mid-term as exports rebound. Viet Nam legal support, management services, sustainable
will continue to benefit from the shift in global initiatives and working with professional industrial
manufacturing supply chains toward competitive real estate agencies.
Clustering & Restructuring SEA manufacturing hubs.
IP Models The Government should continue its investment
The industrial property landscape is changing in infrastructure and upskilling Viet Nam’s labour
The country’s industrial property market depends heavily on operational variables such as infrastructure with more institutional players. As manufacturing force to improve productivity and efficiency.
and distance to source and destination markets. Favourable regions exist for certain industries, such as and logistics mature, products are increasingly Fostering supporting industries, strengthening
Bac Ninh for electronics or Hai Phong for automotive projects. Effectively establishing the downstream diverse such as ready-built factories, warehouses, supply chains, simplifying investment and land use
of sector-specific industries to achieve operational efficiency will require Government commitment and multilevel facilities, hybrid facilities, temperature- procedures, and embracing digitalisation are all
guidance on strategic planning, policy, mechanisms, and preferential incentives. controlled buildings and built-to-suits. In just five key areas for Viet Nam’s industrial sector.
years, occupiers have greater choices and are

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For more information about this report, please contact us

Research Industrial Services

Troy Griffiths John Campbell
Deputy Managing Director Associate Director, Head of Industrial Services

+84 933 276 663 +84 986 718 337

TGriffiths@savills.com.vn JCampbell@Savills.com.vn