FDI SURGES IN THE FIRST NINE MONTHS: HOW SHOULD REAL ESTATE DEVELOPERS RESTRUCTURE THEIR PORTFOLIOS?

1. THE BIG PICTURE

According to data compiled from the General Statistics Office and the Foreign Investment Agency (under the Ministry of Planning and Investment), Vietnam’s macroeconomic picture in the first nine months reflects a clear recovery, with GDP growth reaching 9.01%, including 9.95% in Q3. Against the backdrop of continued global supply-chain restructuring, Vietnam has emerged as a strategic destination for foreign capital.

Total registered foreign direct investment (FDI) exceeded US$50 billion, marking a significant breakthrough. More important than the scale of capital inflows, however, is the shift in their composition. Actual disbursements continued to grow steadily, with capital flowing primarily into sectors that expand productive capacity—particularly processing and manufacturing, transportation and warehousing—while real estate business remained the second-largest recipient of foreign investment.

2. KEY FIGURES TO NOTE

• US$50.36 billion: Total registered FDI into Vietnam, including newly registered capital, additional capital, and capital contributions/share purchases (M&A), up 76.4% year on year.

• US$21.07 billion: Actual FDI disbursement, up 12.1% year on year, representing the highest nine-month level in the past five years.

• US$6.94 billion: Newly registered and additional FDI in the real estate business sector, accounting for approximately 16% of total newly registered and additional capital and ranking second nationwide, after processing and manufacturing, which attracted US$21.82 billion.

• US$1.59 billion (more than VND41 trillion): Actual FDI disbursement into the real estate business sector, accounting for 7.5% of total disbursed FDI across the economy.

• US$6.97 billion: Capital contributions and share purchases through 2,335 transactions by foreign investors, up 44%. Of this amount, US$4.33 billion involved acquisitions of existing shares that did not increase charter capital.

• Key destinations and investors: Singapore, South Korea, and Hong Kong ranked among the leading sources of registered foreign investment. By location, Ho Chi Minh City led the country in total registered foreign investment at US$18.23 billion, followed by Thai Nguyen at approximately US$8 billion, Bac Ninh at US$4.27 billion, and Hanoi at US$4.13 billion.

• 5,012 stalled projects: According to a review by the Ministry of Finance, 5,012 projects nationwide are currently facing legal difficulties, involving approximately 213,581 hectares of land and total investment capital of VND3.6 quadrillion.

3. WHAT IS CHANGING?

First, foreign capital is becoming more substantive.

Actual FDI disbursement reached US$21.07 billion in the first nine months—the highest level in five years—indicating that investment commitments are increasingly translating into actual projects rather than remaining on paper. Capital is flowing directly into production infrastructure and operational projects.

Second, M&A is gaining prominence through the acquisition of existing equity.

Of the US$6.97 billion in capital contributions and share purchases, as much as US$4.33 billion, or approximately 62%, involved the acquisition of existing shares without increasing charter capital. This reflects a clear preference among foreign investors: rather than developing projects from scratch through greenfield investments, which typically involve complex and time-consuming legal procedures, international investors are increasingly acquiring stakes in companies that already own legally viable land banks or operating assets. This brownfield investment approach allows them to shorten the investment cycle and reduce execution risks.

Third, the focus is shifting from traditional commercial and residential real estate toward industrial and supporting infrastructure.

Looking at newly registered investment, after processing and manufacturing at US$13.38 billion, the transportation and warehousing sector accounted for as much as US$5.14 billion, or 17.6%. The global supply-chain shift has placed industrial real estate, modern logistics warehouses, data centers, and ready-built factories (RBFs) at the center of foreign investors’ attention.

4. FROM THE PERSPECTIVE OF REAL ESTATE DEVELOPERS

• Product mix and demand: The growth of FDI into direct manufacturing is generating strong demand for high-quality industrial land, modern logistics facilities, and data centers. In the residential segment, demand is also shifting away from speculative investment toward housing for foreign professionals, worker accommodation, and integrated townships supporting industrial clusters and manufacturing hubs.

• Planning and development locations: Tier-1 cities such as Hanoi and Ho Chi Minh City will continue to serve as major financial and economic hubs. However, manufacturing activity is increasingly expanding into satellite areas. In northern Vietnam, the Hanoi–Bac Ninh–Hung Yen–Hai Phong corridor is strengthening its role as an integrated industrial and supply-chain ecosystem. In the south, the Ho Chi Minh City–Dong Nai–Binh Duong–Long An–Ba Ria–Vung Tau corridor, supported by major regional infrastructure projects—including Ring Road 3, the Ben Luc–Long Thanh Expressway, Cai Mep–Thi Vai Port, and Long Thanh International Airport—is creating substantial new development opportunities.

• Legal and site-clearance risks: The gap between US$6.94 billion in registered FDI and US$1.59 billion in actual disbursement in the real estate sector indicates that capital absorption remains constrained by administrative procedures, site clearance, and the legal status of land banks.

• Costs and capital structure: Industrial land rents and infrastructure development costs are expected to rise alongside improvements in regional connectivity. Joint ventures (JVs) with foreign institutions that have access to lower-cost capital can be an effective way to optimize cash flow. However, this requires domestic developers to demonstrate financial transparency and project legal documentation that meets international standards.

5. WHERE ARE THE KEY OPPORTUNITIES AND BOTTLENECKS?

Cross-referencing macroeconomic data with market research highlights four critical bottlenecks and opportunities that real estate developers should pay close attention to:

1. The widening gap between “commitment” and “execution” in real estate

While the overall FDI disbursement-to-registration ratio across the economy stood at approximately 41.8%—US$21.07 billion compared with US$50.36 billion—the real estate sector recorded a much lower ratio of approximately 22.9%, based on US$1.59 billion in actual disbursement against US$6.94 billion in newly registered and additional capital. This indicates that foreign investment in real estate is subject to a significantly longer implementation lag than investment in processing and manufacturing.

(Source: Data from the Foreign Investment Agency under the Ministry of Planning and Investment, as reported by Tai chinh – Dau tu and Dan Tri.)

2. The paradox of “new capital shortages” amid enormous amounts of trapped resources

Vietnam is attracting record FDI inflows while simultaneously having approximately 5,012 projects involving 213,581 hectares of land and VND3.6 quadrillion in total investment that remain stalled or delayed due to legal obstacles. In Ho Chi Minh City alone, 1,338 projects reportedly face difficulties, representing approximately VND658.084 trillion in investment. The artificially constrained supply of legally viable projects is pushing up primary market prices and limiting foreign investors’ ability to expand greenfield investments.

(Source: Reports from the Standing Body of the Prime Minister’s Steering Committee on resolving long-standing stalled projects and cases, together with data from the Ho Chi Minh City Real Estate Association (HoREA), as reported by Dan Tri.)

3. The M&A structure reflects a defensive approach to risk

The US$4.33 billion invested in acquisitions of existing shares without increasing charter capital demonstrates a clear risk-mitigation strategy among foreign investors. Rather than taking on the uncertainty of initiating investment procedures from scratch, foreign funds are increasingly choosing to partner with or acquire existing assets with established legal status. This approach helps reduce execution risk and shorten the time required to achieve returns.

(Source: Nine-month data from the Foreign Investment Agency under the Ministry of Planning and Investment, as reported by Tai chinh – Dau tu.)

4. The expansion of industrial land supply through 2030

The expected addition of more than 11,000 hectares of industrial land at Vietnam’s two major economic poles—approximately 5,000 hectares in the north and more than 6,000 hectares in the south—will intensify competition over infrastructure quality. The advantage is likely to go to projects with direct connectivity to expressways, ring roads, and deep-water ports, rather than those competing primarily on rental prices.

(Source: JLL Vietnam research cited by Dan Tri.)

6. THE LONG-TERM OUTLOOK

Large-scale foreign capital inflows, combined with changes to Vietnam’s legal framework, are expected to reshape the real estate market around three major trends:

• Greater screening and standardization of developers: Under the new Land Law, Housing Law, and Law on Real Estate Business, project development increasingly requires genuine financial capacity, transparent sources of funding, and complete legal documentation. Domestic developers with land banks but limited execution capabilities will increasingly be compelled to sell equity stakes or partner with professional financial institutions and strategic investors.

• Higher technical and sustainability standards for real estate assets: Demand from high-tech manufacturers, R&D facilities, and data centers is introducing new requirements around ESG (environmental, social, and governance), including green building standards, energy efficiency, and carbon-emission reduction. Traditional industrial parks and warehouses that fail to upgrade accordingly may face the risk of declining occupancy rates.

• Co-development models will become increasingly common: 50:50 or 49:51 joint ventures between domestic developers—contributing land banks and local regulatory expertise—and foreign investors—providing lower-cost capital, professional management capabilities, and international tenant networks—are likely to become an increasingly effective investment structure over the next 3–5 years.

CONCLUSION

The FDI picture for the first nine months demonstrates Vietnam’s strong capacity to absorb foreign capital, particularly in real estate serving manufacturing, logistics, and supporting services. However, the key to sustainable growth does not lie in pursuing ever-larger volumes of registered capital on paper. It depends on the ability to remove legal bottlenecks and unlock thousands of stalled projects. For real estate developers, this is a critical window to restructure their portfolios, focus on products that address the genuine needs of Vietnam’s expanding production economy, and proactively standardize their internal capabilities, financial structures, and legal frameworks to be ready for the next wave of international capital and strategic partnerships.