Hanoi (VNA) – Vietnam’s industrial and digital sectors are experiencing a strong growth, fueled by a surge in foreign direct investment (FDI) inflows, large-scale infrastructure projects, and a favourable legal environment, according to Savills Vietnam.

Vietnam's shift towards high-value-added production, along with the expansion of logistics capabilities and data centers, is enhancing its position in the global supply chain, the agency said in a report released on November 8.

According to the report, the success of Vietnam's industrial sector is supported by several factors, including a dynamic workforce, government incentives, openness in trade cooperation, a strategic location, and continuous infrastructure upgrades. High-value industries such as electronics and semiconductors are driving growth, shaping real estate demand, and attracting regional investment.

“Vietnam has evolved from traditional manufacturing, where companies were primarily focused on low labour costs, to a high-tech, skill-intensive nation with advanced production capacities,” said Troy Griffiths, deputy managing director of Savills Vietnam.

With competitive costs, a strategic location, and participation in numerous trade agreements, Vietnam is well-positioned to seize this new wave of investment. As it integrates into global markets, Vietnam will play a key role in the future of Southeast Asia's industrial sector, maintaining its reputation as an ideal destination for industrial and logistics solutions.

Leading FDI areas include high-value industries such as electronics, automotive components, semiconductors and green technology.

Key investors, including the Republic Korea, Singapore, and Japan, show a shift to high-tech and high-value production. It now makes up around 63$ of FDI inflows, overshadowing traditional low-cost manufacturing sectors.

By 2025, high-value industries and FDI are expected to sustain strong demand for industrial real estate.

Vietnam is ramping up infrastructure spending, allocating 7% of GDP to key projects, including the North-South Expressway, Long Thanh International Airport in Dong Nai province, and deep-water ports like Cai Mep in Ba Ria-Vung Tau province.

Digital connectivity is also a priority, with 5G network expansion and data centre developments driving e-commerce and logistics growth.

Savills Vietnam experts highlight that with the booming e-commerce sector and rising FDI, demand for warehouses and ready-built industrial spaces has surged.

In 2024, the supply of ready-built factories and warehouses increased by 31%, with occupancy rates exceeding 80% in key regions.

The report emphasises Vietnam warehousing costs remain highly competitive, averaging 5.6 USD per square metreꦕ./.