- As global supply chains continue to face disruption risks driven by geopolitical tensions and rising logistics costs, in your view, how should Vietnam’s industrial real estate sector adjust its development strategy to maintain its appeal to international investors?
Answer: Geopolitical shifts are not just risks, they are catalysts for Vietnam to accelerate its “Quality over Quantity” evolution. To maintain its appeal, Vietnam’s industrial real estate sector should transition from providing just land to providing resilient ecosystems. The adjustments should focus on:
(i) Moving beyond core hubs (like Bac Ninh or Binh Duong) into satellite provinces. This de-risking through geographic spread allows investors to find scalable land banks at more competitive entry points.
(ii) Vietnam’s neutral and stable geopolitical stance acts as a safe harbor. By streamlining administrative procedures and enhancing legal transparency, the sector provides a predictable environment that offsets the volatility seen elsewhere in the world.
- Rising oil prices are putting significant pressure on transportation, production, and industrial park operating costs. How might this affect FDI enterprises’ decisions regarding land leasing, factory expansion, or the relocation of production chains in Vietnam?
Answer: While rising oil prices create short-term pressure, they are forcing a long-overdue efficiency revolution that might benefit FDI enterprises in the long run. In my opinion, the pressure of energy costs could influence FDI decisions in several positive ways:
(i) Instead of isolated factories, we can see a trend toward industry clustering. By co-locating with suppliers within the same industrial park, enterprises are drastically reducing transportation costs and fuel consumption.
(ii) Higher road transport costs are accelerating the government’s push for multimodal transport. Enterprises can look for leasing land near deep-sea or areas with strong inland waterway connectivity to bypass expensive trucking.
(iii) Rising costs is a “nudge” towards automation. FDI can seek to expand their footprints within Vietnam using “Smart Factory” technologies that consume less energy and require fewer logistical movements.
- As businesses increasingly prioritise supply chain resilience, could the development of industrial parks integrated with logistics facilities, green energy solutions, and smart infrastructure become Vietnam’s next competitive advantage in attracting investment capital?
Answer: Absolutely. Such a model is no longer a luxury, it is Vietnam’s next “Blue Ocean” strategy. Such a model offers two distinct advantages:
(i) Multinational corporations (MNCs) have strict net-zero targets. Industrial parks that offer rooftop solar, water recycling, and waste-to-energy solutions allow these firms to meet global ESG standards effortlessly, making Vietnam a more attractive destination than regional peers who still rely heavily on fossil fuels.
(ii) By building “Logistics-linked Industrial Zones,” we eliminate the gap between production and distribution. This “one-stop infrastructure” reduces overheads and makes the supply chain more resilient to external shocks.
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For more information on the above, please do not hesitate to contact the author Dr. Oliver Massmann under [email protected]. Dr. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
