Ho Chi Minh City, July 2025
Vietnam’s real estate M&A market has entered an active phase, with foreign capital inflows recording significant growth in the first half of 2025. Nguyen Thanh Tam, Principal of NAI Vietnam, shared his assessment of current market dynamics and the key trends shaping the sector’s outlook.
Strong FDI Inflows Into Real Estate
Commercial real estate M&A activity remained robust in H1/2025, supported by investment yields ranging from 5% to 8% — competitive by regional standards. Office capital values in Ho Chi Minh City continue to sit well below comparable markets across Asia, a factor that has attracted sustained interest from international investors.
Real estate attracted approximately US$5.17 billion in FDI during the first six months of 2025, representing around 24% of total registered investment capital and more than doubling year-on-year. Asian investors led the inflows, with Singapore and South Korea at the forefront, followed by China and Japan.
“The growing presence of international investors brings more than capital,” said Mr. Nguyen Thanh Tam. “It introduces higher operational standards and management expertise that push the market toward greater transparency and professionalism.”
Industrial Real Estate Remains Resilient
On the potential impact of US tariff measures on Vietnamese exports, Mr. Tam noted that while some exporters may adopt a cautious near-term approach, Vietnam’s structural advantages remain intact over the long run.
Vietnam holds the most extensive network of free trade agreements in ASEAN, including CPTPP, EVFTA, and RCEP, which collectively strengthen its tariff competitiveness. Combined with its strategic location bordering China, competitive labor costs of approximately US$3.00 to US$3.50 per hour, a stable political environment, and strong government support for industrial development, Vietnam continues to align with the “China +1” diversification strategies pursued by global manufacturers.
Ready-built factory and warehouse demand has continued to strengthen, with occupancy rates for ready-built factories in southern Vietnam reaching 84% and logistics facilities at 75% in Q1/2025. FDI enterprises seeking fast production space are driving growth in this segment.
Four Trends Shaping the Market Ahead
Mr. Tam identified four trends expected to define Vietnam’s real estate landscape in the near to medium term:
High-tech manufacturing investment. Major corporations including Samsung, LG, and Intel are expanding their Vietnam operations. Ho Chi Minh City, Da Nang, and surrounding provinces are emerging as new hubs for high-tech manufacturing, generating demand for quality industrial space, logistics infrastructure, and skilled workforce facilities.
Satellite industrial urban development. Limited land availability in city centers is driving a wave of industrial relocation to peripheral areas such as eastern Hanoi, Thu Thiem, and Bac Ninh. New industrial zones in these locations are absorbing investment flows and relieving pressure on urban core infrastructure.
Green and sustainable development. International tenants increasingly prioritize projects with green certifications, making ESG compliance a near-mandatory requirement for competitive real estate assets. The number of Grade A and B offices meeting environmental standards is expected to grow significantly in the period ahead.
Ready-built facilities. The strong occupancy performance of ready-built factories and warehouses reflects persistent demand from FDI businesses seeking immediate production space. This segment offers developers the advantage of fast asset monetization and predictable cash flow.
Challenges Ahead
Despite the positive outlook, structural challenges remain. Complex legal procedures continue to delay many projects, making it difficult for investors to access “clean” assets — those with completed legal documentation, no disputes, and full transaction eligibility.
Quality commercial land in major cities is also increasingly scarce. Central Ho Chi Minh City land prices have surpassed VND 500 million per sqm, compressing returns. In key industrial zones, occupancy rates above 85% to 90% leave limited room for new entrants seeking available plots.
“FDI inflows remain on an upward trajectory, which reflects a high degree of confidence in Vietnam’s market fundamentals,” Mr. Tam noted. “If Vietnam maintains macroeconomic stability, continues to improve administrative procedures, and develops internationally compliant assets, the country’s real estate sector will remain one of the most compelling destinations in the region.”
This article is based on an interview originally published by Bao Dau Tu (Investment Newspaper) on 30 July 2025. The views expressed are those of Nguyen Thanh Tam, Principal of NAI Vietnam.
