Vietnam has so far been appointed as the biggest beneficiary of the U.S. – China trade conflict. The rising star of Southeast Asia is facing its greatest opportunity to become a new manufacturing hub of the world. Hence, industrial property market of Vietnam is very upbeat with surge of land and factory leasing enquiry from both existing and new players. However, the most concerned matter is the capability of Vietnam to welcome wave of manufacturing relocation when numerous challenges remain.
- Rents and occupancy of industrial parks in major manufacturing cities and provinces have escalated amid limited industrial land supply. Emerging provinces are showing huge potential to become next industrial hubs of Vietnam.
- Manufacturing will continue to shift out of China due to rising costs; trade conflict with the U.S.; and manufacturers’ strategy of reducing dependence on a single market and enhancing supply chain resilience. Industrial property market in Vietnam will undoubtedly benefit from this trend.
- Nonetheless, Vietnam has faced many challenges in which surging foreign investment from China (which could leave Vietnam exposed to U.S. tariffs), imbalance trade and infrastructure capacity constraints are notable matters.
- It is time for critical makeovers of Vietnam industrial property market in order to take advantages of supply chain relocation and manufacturing shifting.