Post-merger boost being felt in industrial real estate

Post-merger boost being felt in industrial real estate

The recent adjustment of administrative boundaries across the country is expected to provide fresh momentum for industrial real estate as it enters a new phase of strategic transformation

Ho Chi Minh City has faced difficulties in developing new industrial areas due to the shortage of available land. According to the city’s Export Processing and Industrial Zones Authority (HEPZA), the city has only about 74 hectares of cleared land waiting for new investment.

However, this land is fragmented and scattered, while many industrial parks (IPs) planned as far back as 20 years ago remain stalled because of unresolved site issues.

HEPZA deputy head Tran Viet Ha noted that even in Binh Chanh district, a priority area earmarked for industrial development, at least four large-scale IPs have remained stagnant due to procedural problems and a lack of synchronised land clearance. At the same time, efforts to convert low-efficiency agricultural land into industrial and service-use land continue to face delays stemming from lengthy procedures and legal barriers. These issues are beginning to slow down foreign capital inflows into Ho Chi Minh City, particularly in high-tech manufacturing.

“In this context, the merger of Ho Chi Minh City with Binh Duong and Ba Ria–Vung Tau is seen as a strategic solution, not only simplifying the administrative apparatus but also enabling expanded planning for large-scale, well-structured IPs that align with modern development trends,” Ha said at a seminar on the topic last month.

Ha noted that the newly expanded Ho Chi Minh City now hosts 66 export processing and IPs, covering over 27,000ha.

Under the master plan with a vision towards 2050, the city is expected to grow to over 100 such zones, with a total planned area of nearly 50,000ha, cementing its role as Vietnam’s leading industrial hub.

“Between now and 2030, Ho Chi Minh City’s export processing and IPs target investment attraction of $20 billion, with an average capital density of $8–10 million per hectare and disbursing 70 per cent of capital on schedule,” Ha added.

Vu Minh Chi, senior manager of Industrial Services at Avison Young Vietnam, said the merger would not only expand the land reserve but also accelerate improvements in technical infrastructure and administrative mechanisms, making it easier for localities to meet the new selection standards of foreign backers.

“Investors today are prioritising IPs with strong connectivity, competitive operating costs, and, most importantly, integrated services, ranging from logistics to housing, healthcare, and education for experts and workers,” Chi told VIR.

Against this backdrop, industrial real estate in the coming period will no longer be just about land availability. Instead, factors such as infrastructure quality, digital readiness, and accompanying services will be decisive in attracting overseas funding, Chi added.

Chi explained that next-generation IPs will need to integrate at least three elements: digital infrastructure, a robust supporting enterprise ecosystem, and comprehensive amenities such as research and development centres, accommodation, and healthcare services for workers.

“In particular, the expanded coastal access brought by administrative mergers will create opportunities to develop integrated seaport–industrial complexes, capitalising on the global shift away from traditional markets constrained by high land prices and limited expansion space,” Chi said.

According to a report on the provincial merging and its impact on real estate, released by VCB Securities in July, the combined IP area of Ho Chi Minh City and former Binh Duong and Ba Ria-Vung Tau exceeds 33,000ha.

With a well-connected infrastructure system comprising the expressways, ring roads, and national highways, and major ports such as Cai Mep and Cat Lai, the region is emerging as a large-scale industrial, logistics, and export hub for southern Vietnam. Cai Mep-Thi Vai Port, in particular, is positioned as the primary export gateway for the entire cluster.

The report also cites that the allocation of industrial land has also become more efficient. While Ho Chi Minh City previously had no more land quota for IPs, projects can now be flexibly redistributed to the former Binh Duong or Ba Ria-Vung Tau areas, where land resources and development potential remain ample.

Similarly, the merger of Bac Ninh and Bac Giang provinces in the north has expanded space for high-tech development. The combined cluster now boasts more than 11,700ha of IPs, creating opportunities to transition from fragmented zones into a cohesive high-tech industrial region with greater depth and stronger value chains.

Another advantage lies in strengthening bargaining power with giants such as Samsung, Foxconn, and Goertek, all of which already operate across both provinces. Moreover, redistributing projects from the former Bac Ninh area to Bac Giang helps ease infrastructure pressures, while also unlocking the sizeable land reserves in the neighbouring province, it added.

Factories in Tan Uyen city, the southern province of Binh Duong (Photo: VNA)

Vietnam Industrial Property Forum 2025

To explore the new landscape of industrial real estate, tackle emerging challenges, and discuss forward-looking strategies, VIR in partnership with the Vietnam Industrial Real Estate Association will host the fifth annual Vietnam Industrial Property Forum on Wednesday, October 29 in Ho Chi Minh City.

Themed “Embracing Change, Positioned to Lead”, the forum will explore Vietnam’s position in the global investment and supply chain landscape, while highlighting new growth drivers for industrial real estate.

The event will also dive into next-generation industrial park models – green, digital, and integrated with data and logistics – and discuss policy, infrastructure, and institutional reforms needed to attract strategic capital.

The forum, which will be livestreamed on VIR’s various platforms, will feature a main forum with leading Vietnamese and international speakers; and will honour outstanding industrial real estate developers with green development strategies. There will also be site visits, as well as an exhibition on products, services, and models of eco-industrial parks and green development.

VIR