U.S. Tariff Announcement: A Major Impact in H1/2025
One of the biggest developments affecting the industrial real estate sector in the first half of this year was the U.S. government’s announcement in early April of retaliatory tariffs on goods imported from several countries, including Vietnam.
FDI Continues to Grow Despite Tariff Concerns
In the first six months of 2025, Vietnam attracted USD 21.5 billion in foreign direct investment (FDI), up 32% year-on-year, reflecting investors’ continued confidence and demand for production expansion. The manufacturing and processing sector remained the top recipient, drawing over USD 11.9 billion, or 55.6% of total registered capital.
Several major projects have broken ground recently, including:
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Lite-On Technology’s electronic components factory in Quang Ninh (USD 690 million), and
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Victory Giant Technology’s PCB plant in Bac Ninh (USD 540 million).
FDI disbursement reached USD 11.7 billion, up 8.1%.
According to CBRE, in Q1/2025, total leased land area in tier-1 industrial zones in Northern Vietnam reached 200 hectares. The average occupancy rate rose to 79.7% (up 0.8%), and average land rent increased 4%, reaching USD 139/m²/lease cycle. In Southern Vietnam, industrial zones maintained a stable occupancy rate of 89%. Notably, average asking rents in tier-1 Southern zones (excluding HCMC, which is fully leased) reached USD 170/m²/lease cycle, rising 2% quarter-on-quarter and 4% year-on-year.
Many memoranda of understanding (MOUs) were put on hold, and about 20% of new lease contracts were delayed. While the final outcome depends on U.S.-Vietnam trade negotiations, the growing uncertainty has impacted investor sentiment in the short term.
According to SSI Research, although the U.S. tariff implementation was postponed until July 9, 2025, the announcement had already indirectly affected businesses leasing land in industrial parks—most of whom operate in export sectors like textiles, seafood, and footwear.
Investor Uncertainty and a Slowdown in MOUs
A recent survey of major industrial park developers such as VSIP, Idico, Becamex, and Long Hau shows that the number of MOUs has declined compared to previous periods. This slowdown stems from concerns over unpredictable changes that could affect production expansion plans and new investment commitments.
However, these park operators have not observed a significant shift of FDI flows to other countries, as Vietnam still maintains key competitive advantages: political stability, an abundant labor force, and attractive investment incentives from the government.
In Q1/2025, listed industrial park developers reported total revenue of VND 15 trillion (up 54%) and net profit of VND 2.958 trillion (up 84%), mainly from recognizing land lease contracts signed in 2024.
Industrial Park Supply Increasing
Vietnam is poised to benefit from upcoming policy reforms aimed at enhancing FDI inflows into industrial zones. For example, the draft amended Investment Law proposes a range of measures to improve the business environment, including a 30% reduction in administrative processing time and related costs, as well as the elimination of at least 30% of unnecessary conditions.
These reforms aim to simplify the investment process and make it more convenient for both domestic and foreign investors. In parallel, tax incentives remain in place for businesses operating in industrial parks.
According to Clause 4, Article 19 of Circular No. 78/2014/TT-BTC, eligible companies are entitled to a 100% corporate income tax exemption for the first two years, followed by a 50% reduction over the next four years. Some provinces, such as Vinh Phuc, have offered even more generous incentives—two years tax-free and a 50% reduction for the following nine years.
These supportive policies are expected to enhance Vietnam’s appeal as a competitive FDI destination—especially amid global economic uncertainty.
Land Rents and Future Outlook
Land rental prices are forecast to remain stable through 2026. According to Colliers, the average rent in Indonesia’s major industrial zones (Karawang, Bekasi, and Tangerang) was USD 176/m²/lease cycle in 2024—about 14% higher than the average in Northern Vietnam and nearly equivalent to Southern Vietnam’s levels.
Leading developers such as Kinh Bac, Idico, Long Hau, and SIP expect land rental prices in existing parks to remain stable in 2025, reflecting cautious tenant sentiment and growing competition.
On the supply side, a strong pipeline is projected for 2025–2026. In the first half of 2025 alone, 26 new industrial parks went into operation, adding 7,867 hectares—an increase of 38% and a 6.8% boost to the total operational industrial land area.
Notably, new supply is shifting geographically from tier-1 to tier-2 markets, with most projects concentrated in industrial provinces.
Rubber Land Conversion Continues to Drive Industrial Growth
The conversion of rubber plantations into industrial zones remains a positive trend. From 2024 through mid-2025, many new parks were approved on former rubber land, including:
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Hiệp Thành, Xuân Quế – Sông Nhạn, and Bàu Cạn – Tân Hiệp (former Dong Nai),
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Bắc Đồng Phú Phase 2 and Minh Hưng III Phase 2 (former Binh Phuoc),
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Thaco (former Binh Duong).
These projects cover a combined 4,081 hectares.
This shift is expected to generate significant revenue for rubber enterprises such as GVR, TRC, PHR, and DPR, stemming from land conversion for industrial development.
Source: Bình An – Kinh tế Sài Gòn Online