Vinh Phuc is emerging as an industrial hotspot in the Northern Key Economic Zone (NKEZ). The province is home to manufacturers from Korea, China, Taiwan, Japan and Europe, many of whom have increased their investment capital and expanded their production scale within the province.

The province receives healthy FDI inflows. It is home to 493 FDI projects with investment capital of US$6.6 billion, making it the 16th largest FDI province in Viet Nam. In 9M/2022, the total registered FDI reached US$102 million, and 16 of the 18 newly registered projects were in manufacturing and processing and contributed over US$85 million. According to the Department of Planning and Investment, in 10M/2022, the province had 1,123 newly registered companies with a total registered capital of VND 20,531 billion. There was an 18.7% increase in the number of businesses and the investment capital is double year-on-year. The province currently has seven industrial parks, with 13 in the pipeline.

John Campbell, Associate Director, Industrial Services, Savills Viet Nam shared: “In recent years, Vinh Phuc has attracted and encouraged diversified investment projects. High-value sectors lead and include computers, electronics and automotive manufacturers. Notable companies include Daewoo, Haesung Vina (Korea), Toyota, Honda, Sumitomo (Japan), Compal (Taiwan), Piaggio (Italy), and De Heus (Ha Noi), NorthStar Polaris, and Weldex (USA).” 

Rising Demand for RBWs/RBFs

Global supply chain and geopolitical movements, especially regarding China, have been a catalyst for diversification into Viet Nam. There has been an increase in demand for RBF/RBW, with a trend of foreign rental developers capitalising on and catering to this demand.

Savills Industrial Insider 8M/2022 shows that several ready-built projects broke ground in the first half of 2022 to address the rising demand, including SLP Long Hau (Long An), Ho Nai Industrial Park (Dong Nai) Core5 Hai Phong (Hai Phong) and VLI (Hung Yen). 

Currently, manufacturers looking to establish themselves in Vinh Phuc face capital-intensive processes that require commitments of up to 50 years. Conversely, ready-built properties offer tenants speed to market, minimal capital expenditure, and flexible lease terms of only three years. With established electronics and automotive manufacturers in the area, ready-built properties will allow supporting industries and suppliers to relocate or diversify their manufacturing in Vinh Phuc. As supporting industries increase, so will demand for RBFs and RBWs. 

Although Vinh Phuc has a sizeable industrial land supply, there are few factories or warehouses for rent for smaller tenants that require less than 10,000 m2. John Campbell commented: “The supply has not met the rising demand for this type of product. We have received enquiries for ready-built factories in Vinh Phuc of 5,000 m2 to 10,000 m2. However, there is no suitable supply. While there is available industrial land, there are no ready-built properties. There is great potential for some of the established ready-built developers in Viet Nam to explore Vinh Phuc and capitalise on its potential.”

New Industrial Model

John Campbell said: “The industrial real estate market in Viet Nam is becoming more competitive than ever. Years ago, an industrial project required only a simple master plan, mainly to meet the demand of manufacturing. However, master plans must become more sophisticated. For example, properties must consider how they will deliver on green and sustainability requirements. Today, master plans must consider manufacturing projects but also logistics, R&D, commercial service areas, and even dormitories or housing projects. One park that has considered and delivered on these requirements is Green Park Vinh Phuc by YSL Group from Korea.” 

Green Park Vinh Phuc spans 300 ha and delivers smart and green properties. It offers an integrated management system, AI-empowered security system, and a wastewater treatment system that ensure efficient and environmentally friendly operations. 

If you are interested in Vinh Phuc’s industrial market or keen on learning more about ready-built factories or warehouses, contact, Savills Industrial Services. The team offers comprehensive consultancy services backed by the latest market research from across Viet Nam and the APAC region. Contact Thomas Rooney today.