Industrial property ready for welcoming high-tech FDI wave

3D design of the first ready-built factories and offices of Soilbuild

Speaking with VIR about the opportunities in Vietnam's industrial property sector, Ben Ding Khoon Yew, general director of Soilbuild International (Vietnam), said the market is experiencing significant growth and transformation due to global supply chain restructuring. This shift offers various opportunities and challenges, particularly regarding competition.

"Due to de-globalisation, Vietnam can capture increased FDI from the relocation and decentralisation of manufacturing and logistics supply chains. This creates vast opportunities for industrial real estate developers to provide land, industrial, and logistics space," Yew said.

He emphasised the need for sustainability and green development in smart industrial spaces or land for manufacturers to optimise costs and leverage advanced technologies. Alongside industrial growth, the supporting transport and utilities infrastructure must be developed to meet increasing demand, offering a good opportunity for infrastructure and utilities developers.

Decentralisation and cost optimisation are pushing manufacturers to second or even third-tier provinces, making areas like Nghe An attractive for investment. Soilbuild has invested in this region and is developing ready-built factories and offices for the Spectrum Nghe An project.

Yew also pointed out challenges in Vietnam's industrial property sector, such as regional competition. The country competes with other Southeast Asian nations like Thailand, Indonesia, and Malaysia, which offer their own incentives and advantages. Domestically, established local developers with significant market knowledge and networks present strong competition to new entrants. In prime industrial zones, rising land prices due to high demand make it challenging for new projects to secure affordable land.

Labour supply, especially in key economic zones, poses another challenge for attracting manufacturers. Infrastructure issues, including power rationing and traffic congestion, further complicate the situation.

Ben Ding Khoon Yew, general director of Soilbuild International (Vietnam) at the Vietnam Industrial Property Forum 2024 on July 30

Despite operating for 47 years in Singapore and having a presence in Myanmar, the United Kingdom, and Australia, Soilbuild is a relatively new player in the Vietnamese market. Bac Ninh, Hung Yen, and Nghe An provinces are its initial focus areas in the country.

Nghe An province is emerging as Vietnam’s next manufacturing hub, attracting major companies like Foxconn, Goertex, and Sunny. The central province offers a strategic location, efficient logistics, an abundant workforce, favourable tax incentives, and a business-friendly local government.

In Vietnam, Soilbuild's first ready-built factory project in Nghe An is being constructed to LEED certification standards, continuing the company's commitment to sustainability, which began in Singapore. Additionally, Bac Ninh and Hung Yen are well-established as vibrant industrial hubs due to their strategic locations, robust manufacturing ecosystems, excellent infrastructure, proximity to airports and seaports, skilled workforce, and supportive local governments.

In the face of economic challenges and rising interest rates, industrial property developers in Vietnam are increasingly adopting AI, automation, and robotics to enhance efficiency and reduce operational costs. While the adoption of these technologies is still evolving, several developers have made significant strides in integrating advanced technologies into their operations. These efforts help reduce costs and position Vietnam as a competitive destination for global manufacturing and industrial activities.

"Coming from Singapore, we have benefited from adopting technologies. Over the years, we have pushed the boundaries of our sustainability journey to reduce overall energy consumption and emissions and secure a more sustainable future and resilient urban landscape for future generations. We are committed to promoting sustainable development in Vietnam," Yew said.

Soilbuild International’s commitment to sustainable industrial development Recognising the potential in Vietnam’s industrial property market, Soilbuild is committed to providing modern ready-built factories and offices along with top-notch services. Ben Ding Khoon Yew, general director of Soilbuild International (Vietnam), shared the company’s market expectations with VIR’s Nguyen Huong.

Sustainability included in all Soilbuild’s buildings Soilbuild has been applying and including sustainability in its industrial parks and factories for a long time to level up the values ​​and positions of industrial property.

Soilbuild honoured for green transformation strategy at VIPF 2024 At the Vietnam Industrial Property Forum on July 30, Soilbuild International (Vietnam) was honoured as an industrial property developer with a sound green transformation strategy.

Green transformation in IPs driving new investment waves Eco-industrial parks are an inevitable trend, and Vietnamese industrial property developers should green up quickly to increase competitiveness.