Consequently, this policy has attracted attention not only from urban planners and public administrators but also from investors in the real estate sector - particularly industrial real estate. Adjustments in administrative boundaries are opening up new opportunities for IRE to break through and become a highlight in local socioeconomic development strategies.
Merging administrative units supports the restructuring of development space and infrastructure connectivity. It is typically accompanied by new urban and regional planning to integrate transportation systems and socioeconomic functional zones. Suburban districts or peripheral regions, once merged with urban centers, are likely to receive greater infrastructure investment, enhancing regional connectivity and expanding land banks for new industrial zones. Moreover, upgraded administrative units often come with improved public services, a more transparent investment environment, and more modern governance systems-creating trust among domestic and foreign investors. Newly merged areas can benefit from favorable investment policies, streamlined administrative procedures, and attract high-quality FDI in technology and clean industries. Meanwhile, the value of land in these merged areas often rises due to expectations of infrastructure upgrades and urbanization. For industrial land, this translates into higher rental prices and improved return on investment for industrial park developers. The IRE sector is also evolving from traditional models to eco-industrial parks, urban-industrial-service zones, and high-tech supporting industry clusters. Newly merged localities can capitalize on updated planning policies to develop multi-functional industrial zones that meet diverse investor needs and foster sustainable growth.
The consolidation of administrative boundaries acts as a “catalyst” for IRE development in four key aspects: Expanding land supply and enabling large-scale planning; Creating integrated industrial–urban ecosystems; Synchronizing policies and legal stability; Upgrading infrastructure and workforce quality.
Notable Local Examples Where Administrative Consolidation Drives IRE Growth
Ho Chi Minh City – Binh Duong – Ba Ria–Vung Tau: Southern Mega Industrial and Logistics Urban Cluster
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The merging of Ho Chi Minh City with Binh Duong and Ba Ria–Vung Tau would create a massive economic zone supported by ring roads, the Cai Mep–Thi Vai deep-sea port, Long Thanh International Airport, and an interconnected logistics network. Binh Duong, already dubbed the “industrial capital” with 12,720 hectares of industrial zones and a 91% occupancy rate, will expand its capability to support high-tech, supporting, and logistics industrial development. The deep-sea port at Cai Mep connects directly to the U.S., Europe, and Asia, significantly cutting transportation costs. With integrated planning, this tri-province mega-urban region would become Southeast Asia’s logistics hub.
The unification of these three localities not only establishes the largest urban-industrial agglomeration in Vietnam but also creates a vast development frontier for the IRE sector - a key pillar in the national strategy for investment attraction, manufacturing, and global integration.
With abundant land, strategic inter-regional and international connections via key expressways, seaports, and airports, the expanded Ho Chi Minh City will continue to be a powerful driver of integrated industrial-logistics real estate. Areas like Cu Chi, Binh Chanh, Nha Be, Thu Duc, Ben Cat, Di An, and Phu My are positioned as prime locations for expanding or establishing new industrial parks due to their proximity to central hubs, excellent connectivity, and land conversion potential.
Additionally, the expanded city offers key factors sought by IRE investors: Reasonable operating costs compared to other Southeast Asian cities; A large, skilled labor force concentrated in urbanized zones; Increasingly complete infrastructure, shortening delivery times from factories to ports and airports.
The city government is also accelerating administrative reform, offering investment incentives, developing digital infrastructure, and implementing metrics such as DDCI, PAR Index, and DTI to improve the investment climate. These conditions favor IRE developers (e.g., VSIP, BWID, WHA, Frasers Property) to invest in new or upgraded industrial parks aligned with ESG standards and sustainability.
Thus, the expanded Ho Chi Minh City is not merely an administrative upgrade but a strategic foundation for sustainable IRE development. With its scale, location, and clear planning orientation, the city is poised to become a leading Asian industrial, technology, and logistics hub - playing a central role in restructuring Vietnam’s industrial economy.
Bac Ninh – Bac Giang:
The Northern Mega Industrial Capital
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Under the consolidation resolution, Bac Ninh and Bac Giang will form a new administrative unit named Bac Ninh. Bac Giang currently leads the country in GRDP growth (14% in Q1/2025), while Bac Ninh is a major FDI magnet with 12 industrial zones and a 62% occupancy rate. News of the merger immediately drove up land prices in Bac Giang by 10–20% and increased transactions by 20-40%, especially near industrial zones such as Viet Yen, Tan My, and Dong Son. Experts believe the consolidation will expand land banks, support planning for specialized zones (e.g., automotive and semiconductor), and boost international investment.
South-Central Coast: Coastal Growth Hub for Green Industry and Logistics
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The merger of Khanh Hoa and Ninh Thuan into one administrative unit opens the door for this coastal region to become a strategic marine industrial growth pole. With deep-sea ports (Van Phong, Ca Na, Son My), international airports (Cam Ranh, future Phan Thiet), and key transport corridors like the North - South Expressway and national railways, the region is well positioned to develop industrial processing tied to renewable energy and maritime logistics.
By combining wind and solar power from Ninh Thuan and Binh Thuan with deep-water port potential in Van Phong and Ca Na, the region can form integrated industrial - renewable energy - logistics clusters - attracting major global players in high-tech manufacturing, deep processing, and maritime logistics. This paves the way for multifunctional industrial zones that balance development with sustainability.
Northern Mountainous Region: Cross-Border Industrial–Logistics Corridor
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The newly merged province of Thai Nguyen and Bac Kan is expected to form a strategic industrial–logistics economic corridor in the northern midland and mountainous areas. Located near key northern economic centers (Hanoi, Bac Ninh, Hai Phong) and with direct links to China via border gates like Tra Linh and Ta Lung, the area holds vast potential as a center for supporting industries, logistics, and agri-forestry processing for export.
The development of the Dong Dang - Tra Linh expressway and Hanoi’s expanded ring road system will spur the creation of specialized industrial zones, such as:Electronic component and mechanical engineering support zones in Thai Nguyen (a northern high-tech manufacturing hub); Wood, forest product, and light mineral processing zones in Bac Kan and Cao Bang; Border logistics zones integrated with bonded areas for cross-border trade.
With abundant land, low labor costs, and improving investment conditions, this new province can compete for light and clean industry supply chains shifting from traditional hubs like Bac Ninh, Hai Duong, and Vinh Phuc due to rising land and operational costs.
Conditions for industrial real estate Breakthrough After Administrative Consolidation
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Consolidating administrative units not only expands development space but lays the groundwork for systematically building a modern, sustainable IRE ecosystem. However, to fully capitalize on this opportunity, experts note that localities must address four critical conditions: legal institutions, planning, financing, and development strategy.
• Eliminate overlapping administrative procedures between sectors and regions. Post-merger alignment of processes is a major challenge without clear, decisive central directives.
• Establish a “rapid response” mechanism for investment approvals - especially for key industrial projects - as this is crucial to retaining FDI amid regional competition.
• Conduct comprehensive reviews to avoid conflicts between land use, transport, and urban plans - especially outdated zoning that could delay large-scale industrial projects.
• Overcome delays in public investment disbursement for industrial infrastructure. Merged localities should prioritize funding for key transport, digital, and social infrastructure; mobilize private capital via PPP and BOT models for logistics zones, dry ports, power stations, and wastewater treatment plants; and improve budget transparency by establishing revolving infrastructure development funds aligned with demand.
Merging provinces is not just administrative reform aimed at streamlining governance. It also opens new frontiers for deep, sustainable socioeconomic restructuring. Industrial real estate has emerged as a core sector, acting as the "backbone" in Vietnam’s strategy to enhance manufacturing capacity and integrate into global supply chains. However, to realize its full potential, consolidation must be accompanied by synchronized planning, infrastructure, and investment policy, as well as clear communication strategies and long-term development orientations for each industrial region. Early support for SMEs, administrative reform, and digital transformation in industrial park management are also essential. Only then can IRE become a true sustainable growth driver - shaping new economic hubs and raising Vietnam’s global investment standing.
By PhD tran ha linh
