HCM CITY — The ready-built factory (RBF) model in Việt Nam has strategically surpassed the traditional build-on-leased-land approach, becoming the preferred choice for international investors, real-estate consultants noted.

The rise of Việt Nam in the global manufacturing landscape has significantly transformed the industrial real estate market, according to industry experts.

While the conventional land lease model emphasised design control and extended lease terms to optimise Capital Expenditure (CapEx) depreciation, it also carried risks associated with legal compliance and deployment schedules.

In contrast, the RBF model goes beyond offering space; it represents a strategic decision enabling enterprises to achieve faster market entry, control capital costs effectively, and manage regulatory compliance amidst a demanding global supply chain environment.

This shift in tenant preferences reflects a move from "asset ownership and risk management" to "service leasing and optimising capital efficiency," as international investors now prioritise operational efficiency and risk mitigation over asset ownership.

A report from Cushman & Wakefield Vietnam for third quarter of 2025 shows a high nationwide occupancy rate for RBFs, averaging around 88 per cent, with the Southern Key Economic Region boasting an impressive 92 per cent occupancy rate. 

The surge in Foreign Direct Investment (FDI) has been a key driver of this growth, with a majority of new manufacturing projects opting for RBF leases, it said.

Average national RBF rents, as indicated by Cushman & Wakefield, are competitively priced at US$5.5 per square metre per month, making them an attractive option for industries such as precision engineering, electronics manufacturing, textiles, pharmaceuticals, and more.

While tenant requirements are diverse, the most common demand spans small-to-medium modules, ranging from 500 to 5,000sq.m, ideal for Tier 2 and Tier 3 suppliers integrating into global value chains.

Additionally, CBRE has reported a healthy occupancy rate for ready-built warehouses, particularly driven by the logistics and e-commerce sectors. The demand for ready-built warehouses is outpacing the industrial land market as tenants seek flexible solutions and optimised initial investment costs.

Thanh Phạm, director of Research & Consulting, CBRE Vietnam, said: “Ready-built warehouse and factory facilities will gain significant popularity in the coming period. They serve as a crucial solution, helping businesses alleviate the burden of initial capital expenditure, mitigate construction risks, and streamline project timelines. 

"On the supply side, the market is poised to welcome over 600,000sq.m of new ready-built warehouse and factory supply in 2026. Given this anticipated volume, asking rents for these properties are expected to remain stable, with no sharp increases projected. However, as the domestic and international economic landscapes gradually stabilise, we anticipate that rental incentive rates may progressively decrease.”

Việt Nam possesses a distinct competitive edge globally, with RBF rents being significantly lower than international competitors. Regionally, Việt Nam's rents are markedly more favourable than rates reaching $7 to $9 in prime manufacturing zones in China. 

Furthermore, rates are two to three times lower than mature European markets, which typically range from $8.5 to $16 per sq.m per month, often coupled with lengthier legal processes and greater risk.

While Vietnamese industrial real estate rents have seen an upward trend, they remain highly competitive against key ASEAN peers. Việt Nam's primary strategic advantage is its political stability combined with a vast network of free trade agreements, which grant preferential tariff access to 65 per cent of the global market. 

Looking ahead, the RBF market is expected to experience robust growth focused on quality, with the northern region set to add over one million sq.m of floor space in the next three years.

Investment is shifting towards high-specification, ESG-compliant facilities in well-connected provinces, signaling a trend towards higher quality and sustainability in industrial real estate development. — VNS