Vietnam is becoming an attractive destination for businesses looking to rent warehouses, thanks to its rapid industrial growth, booming e-commerce sector, and strong inflow of FDI. However, selecting the right warehouse requires companies to consider several factors, including location, rental prices, infrastructure, and space flexibility. Let’s explore why many foreign businesses choose to invest in Vietnam with KTG Industrial.
Why do many foreign businesses choose to invest in Vietnam?
Vietnam is a destination for supply chain diversification
Vietnam is emerging as a top destination for foreign businesses seeking to diversify their supply chains, offering numerous advantages in its business environment.
Key Factors Attracting Foreign Investment:
- Strategic Geographic Location: Situated near major manufacturing hubs such as China, Japan, and South Korea, Vietnam offers excellent connectivity for international trade.
- Competitive Labor Costs: A young, highly skilled workforce is available at competitive wages compared to other countries in the region.
- Favorable Investment Environment: The government supports businesses through tax incentives, administrative reforms, and reasonable land rental prices.
- Strong Economic Integration: Participation in major FTAs (CPTPP, EVFTA, RCEP) enables favorable export tax rates for Vietnamese goods.
- Supply Chain Diversification Trends: Vietnam benefits from the strategic production diversification of large multinational corporations.
- Commitment to Sustainable Development: The country’s goal of achieving carbon neutrality by 2050 attracts investment in green manufacturing and high-tech industries.
- Developed Warehouse Infrastructure: Significant government investment and supportive policies contribute to advanced logistics facilities.
- International Cooperation: Vietnam and the U.S. have reached agreements on high-tech and semiconductor development, positioning Vietnam as a priority FDI destination after India.
With these advantages, Vietnam is emerging as a leading destination for foreign investment, attracting global giants such as Samsung, LG, Foxconn, and Quanta Computer.
Vietnam’s Notable Achievements:
- 2019: Ranked 8th among the world’s top 20 economies by US News & World Report.
- 2020: Ranked 70th out of 190 countries for ease of doing business.
- 2022: Secured the 11th position among 50 emerging global logistics markets.
- 2023: Ranked 43rd in the Logistics Performance Index.
- Logistics Growth: The logistics sector maintains a growth rate of 14–16% per year, contributing 4–5% of the country’s GDP.
- FDI Attraction: Vietnam has attracted over 32,000 FDI projects from 136 countries and territories, with a total registered capital of $378 billion.
These impressive achievements demonstrate that Vietnam is gradually becoming an attractive destination for international businesses.
The warehouse rental trend in Vietnam is growing annually.
The rise of Ecommerce
The growth of the digital economy and the rise of online shopping are significantly increasing the demand for warehousing. Vietnam, with its rapid e-commerce growth (projected to reach $52 billion by 2025), has become an attractive destination for logistics investment. The country is also benefiting from the China +1 strategy, as many businesses relocate their factories to Southeast Asia, driving the logistics sector’s growth.
Traditional warehouses currently account for 60% of the market, but there is a gradual shift toward modern industrial real estate. An additional 40,000 hectares of industrial land is expected to be developed over the next five years, driving logistics growth to 22% by 2025.
Domestic consumption growth
In 2025, Vietnam aims for GDP growth of 8-10%, with domestic consumption (accounting for 60% of GDP) and public investment (30% of GDP) being the main drivers [1].
E-commerce continues its impressive growth trajectory, with revenue from the five largest platforms reaching VND 318.9 trillion in 2024, a 37.36% increase compared to the previous year. On average, Vietnamese consumers spend over VND 870 billion daily on online shopping [2].
The domestic market plays a crucial role in Vietnam’s economy, driving demand for factory and warehouse rentals. To ensure an efficient supply chain, businesses need to expand their storage facilities, restructure infrastructure, or lease ready-built warehouses.
The Principle of Wisdom
The U.S.-China trade war has accelerated the trend of diversifying FDI away from China to reduce dependency on a single market. In this context, Vietnam has emerged as an attractive destination due to its competitive advantages.
First, Vietnam’s geographic proximity to China supports the continuity of supply chains. Additionally, production costs remain lower than in many neighboring countries, providing favorable conditions for foreign enterprises.
Furthermore, Vietnam’s business environment and infrastructure are gradually improving, enhancing operational efficiency for investors. The country also shares cultural similarities with major investment partners from Northeast Asia, such as Japan, South Korea, and Taiwan, facilitating smoother collaboration and business operations.
Thanks to these factors, Vietnam continues to attract substantial FDI amid the global manufacturing shift.
Moreover, Vietnam has signed multiple Free Trade Agreements (FTAs) with major global partners, including the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). These agreements expand export markets and provide favorable conditions for foreign businesses to access potential markets when investing in Vietnam [3].
Housing rental demand in Vietnam
Vietnam’s logistics sector is experiencing robust growth, driven by increases in manufacturing, exports, and e-commerce. With an annual growth rate of 14% – 16%, the industry has reached a scale of $40 – $42 billion, attracting around 3,000 domestic enterprises and 25 international corporations.
The demand for logistics warehouse rentals is on the rise, especially for facilities serving e-commerce. In 2022, Vietnam’s e-commerce revenue reached $16.4 billion, accounting for 7.5% of total retail sales. However, warehouse supply has not kept pace with demand, particularly in major economic hubs.
In Southern Vietnam, over 70% of warehouse space is concentrated in key economic centers like Ho Chi Minh City, which boasts advanced port systems and logistics infrastructure. Although some industrial zones have high occupancy rates, the overall warehouse supply in Vietnam still lags behind demand.
Current investment trends focus on large-scale warehouses, integrated logistics centers, and sustainable warehouses utilizing renewable energy. Major corporations like Shopee, Tiki, and Lazada are heavily investing in warehouse systems to optimize their supply chains.
The demand for logistics warehouses to support e-commerce is increasing rapidly.
Potential for warehouse rental in Vietnam
The ready-built warehouse and factory market in Vietnam continues to experience strong growth in 2024. According to CBRE, rental prices for warehouses have increased by 2-5%, with occupancy rates reaching 88% in the North and 89% in the South. In Southern Vietnam, the absorption area of ready-built warehouses has doubled, reaching 0.4 million m², driving rental prices up by 2.1% to 5.3% [4].
JLL Vietnam also reported a sharp increase in warehouse absorption rates in the South, while the North maintained stable growth. FDI inflows into this segment continue to rise, with the number of foreign investors increasing fivefold since 2018 [4].
It is expected that warehouse supply in Bac Ninh, Hung Yen, Hai Phong, and southern provinces will continue to expand, with rental prices potentially increasing by up to 4% annually over the next three years. However, intensifying competition will require investors to adopt flexible strategies such as functional integration or model conversion.
KTG Industrial’s service warehouse for rent in Vietnam
KTG Industrial is a joint venture between Boustead Projects (Singapore) and Khai Toan Group (Vietnam), offering international-standard industrial real estate solutions. With a portfolio of modern ready-built factories and warehouses, KTG Industrial is committed to enhancing Vietnam’s industrial and logistics value chain. Their projects not only ensure superior construction quality but also integrate sustainable solutions such as solar energy systems and wastewater treatment.
Among its prominent projects, KTG Industrial Yen Phong IIC – Phase 2 and KTG Industrial Yen Phong IIC (Phase 1) in Bac Ninh stand out with strategic locations, flexible space options, and advanced infrastructure, catering to the expansion needs of industrial and high-tech enterprises.
KTG Industrial Yen Phong IIC – Phase 2
KTG Industrial Yen Phong IIC – Phase 2 easily attracts large enterprises.
Location:
Situated in Bac Ninh, adjacent to National Highway 18 and the Hanoi – Thai Nguyen Expressway.
This area is home to major enterprises such as Samsung and Luxshare, providing strategic connectivity and supply chain expansion opportunities.
Specifications:
KTG Industrial Yen Phong IIC Phase 2 offers 1,216 – 46,643 m² of ready-built factories and warehouses with the following features:
- Floor load capacity: 2 tons/m²
- Floor height: 0.3 m
- Clear height: 8.7 m
- Standard fire protection system
Connectivity:
- Noi Bai International Airport: 22 km (30 minutes)
- Hanoi: 40 km (45 minutes)
- Cai Lan Port: 50 km (60 minutes)
- VSIP Bac Ninh: 6 km (10 minutes)
- Vietnam – China Border Gate: 120 km (170 minutes)
KTG Industrial Yen Phong IIC – Phase 1
KTG Industrial Yen Phong IIC – Phase 1 offers flexible rental spaces.
Location:
Located in Bac Ninh, adjacent to National Highway 18 and the Hanoi – Thai Nguyen Expressway,
allowing tenants to easily connect with major corporations such as Samsung and Luxshare.
Specifications and Area:
- Flexible area: 816 – 52,539 m² (including office space)
- Floor load capacity: 2 tons/m²
- Floor height: 0.3 m
- Clear height: 8.3 – 10 m
- Reinforced concrete flooring with surface hardener
- Standard fire protection system with provision for an automatic sprinkler system
Connectivity:
- Noi Bai International Airport: 20 km (30 minutes)
- Hanoi: 34 km (45 minutes)
- VSIP Bac Ninh: 6 km (10 minutes)
- Cai Lan Port: 50 km (60 minutes)
- Vietnam – China Border Gate: 120 km (170 minutes)
Conclusion:
Finding the right warehouse for rent requires careful consideration of location, cost, and amenities. With a growing market and diverse options, businesses can seize opportunities to optimize logistics operations, reduce costs, and enhance business efficiency. KTG Industrial is proud to be a trusted partner for companies seeking advanced warehouse rental solutions in Vietnam.
References
[1] Ngọc Lan. Tiêu dùng nội địa và đầu tư công là động lực tăng trưởng chính năm 2025. Nhịp sống kinh tế Việt Nam & Thế giới. Published January 12, 2025. Accessed February 10, 2025. https://vneconomy.vn/tieu-dung-noi-dia-va-dau-tu-cong-la-dong-luc-tang-truong-chinh-nam-2025.htm
[2] Hạnh Lê. Thúc tiêu dùng nội địa cho tăng trưởng cao. diendandoanhnghiep.vn. Published February 8, 2025. Accessed February 10, 2025. https://diendandoanhnghiep.vn/thuc-tieu-dung-noi-dia-cho-tang-truong-cao-10149901.html
[3] Thu hút FDI trong bối cảnh mới: Cơ hội và thách thức cho Việt Nam. Published March 11, 2022. Accessed February 10, 2025. https://kinhtevadubao.vn/thu-hut-fdi-trong-boi-canh-moi-co-hoi-va-thach-thuc-cho-viet-nam-21754.html?utm_source=chatgpt.com
[4] Nhà kho, xưởng công nghiệp “được giá.” Tạp chí Tài chính. Published January 16, 2025. Accessed February 10, 2025. https://tapchitaichinh.vn/nha-kho-xuong-cong-nghiep-duoc-gia.html
