Property Acquisition and Mergers: Evolution from Initial Recovery to Long-term Expansion
Vietnam's Real Estate Market on a Steady Growth Trajectory
Vietnam's real estate sector is witnessing a robust expansion, driven by rapid urbanization, a growing middle class, and strong foreign direct investment (FDI). The market is experiencing significant trends in residential, industrial, and data center sectors.
The residential market is projected to grow from USD 33.19 billion in 2025 to USD 57.08 billion by 2030, at a CAGR of 11.45%. This growth is fueled by demand in major cities like Ho Chi Minh City, Hanoi, and emerging hubs such as Danang and Hai Phong. Residential transactions remain strong, particularly for condominiums, though quarterly sales volumes fluctuate.
Foreign direct investment and mergers and acquisitions (M&A) are driving market dynamism. The real estate M&A market, recovering from a nascent phase, is poised for sustainable growth, with increased activity in the second half of 2025 due to legal reforms, improved transparency, and active economic diplomacy attracting capital seeking sustainable returns. Real estate firms resuming operations increased by 42.2% in 2024, indicating heightened industry confidence.
Sector-wise, industrial real estate benefits from Vietnam’s role in regional manufacturing and logistics growth, partly supported by free trade agreements and China+1 strategies. Occupancy rates remain strong in industrial real estate, averaging over 80% in the north and 89% in the south.
Data centers represent a rapidly expanding segment, with key investments like CMC Technology Group’s USD 250 million hyperscale data center in Ho Chi Minh City and the USD 1.5 billion SAM DigitalHub in Binh Duong, marking Vietnam’s emergence as a data center hub in Southeast Asia. This sector’s growth is complemented by rising demand for green building certifications and energy efficiency.
However, challenges remain, including mixed short-term residential sales trends, fluctuating quarterly absorptions, and the need for ongoing regulatory reforms to maintain investor confidence and market transparency. Nevertheless, government support, infrastructure investments, and economic growth prospects collectively underpin a positive long-term outlook for Vietnam's real estate market across residential, industrial, and data center sectors.
In the residential sector, the residential real estate market in Ho Chi Minh City appears poised to absorb new projects from credible developers in the remainder of 2025. The growing confidence of local players is evident, with domestic investors showing increased participation in M&A activities.
The M&A market recorded 447 transactions valued at $6.93 billion in 2024, with domestic investors accounting for 29% of the market's total M&A deal value. The real estate sector ranked as the second most attractive destination for foreign direct investment in the first half of 2025, attracting $5.17 billion.
Moreover, the total foreign direct investment in the first half of the year is over $21.51 billion, a 32.6% increase compared to the same period in 2024. The Vietnam data centre market is projected to reach $1 billion in 2028, and the new Telecommunications Law 2023 permits full foreign ownership in Vietnam's data centre market.
Growth in satellite provinces is set to continue, supported by infrastructure development and administrative consolidation. The average development cost of a data centre in Vietnam is nearly half that of Japan, making it an attractive investment opportunity.
However, unresolved legal issues and protracted approval procedures continue to impede M&A activity in the real estate sector, creating uncertainty for foreign investors. Several structural challenges persist in Vietnam's real estate market, including land scarcity, complex regulatory procedures, rising construction costs, and potential labour shortages.
Despite these challenges, Vietnam offers a yield on cost of 17.5-18.8 per cent, second only to Singapore in the Asia-Pacific region. The industrial real estate sector is poised for growth, with the supply of ready-built factories and warehouses expected to expand.
In conclusion, Vietnam's real estate market presents a promising investment opportunity, with robust growth expected in the residential, industrial, and data center sectors. However, addressing ongoing regulatory challenges and ensuring market transparency will be crucial to maintaining investor confidence and attracting sustained foreign investment.
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Investors looking to expand their business ventures might find potential in Vietnam's real estate market, specifically in the residential sector, where Ho Chi Minh City is expected to absorb new projects from credible developers. In addition, the M&A market, buoyed by legal reforms, improved transparency, and active economic diplomacy, is poised for significant growth, particularly in the second half of 2025. Alternatively, those focusing on finance and investing might consider the industrial sector, given Vietnam's role in regional manufacturing and logistics growth, or the rapidly expanding data center segment, with attractive investment opportunities due to lower development costs compared to Japan.
