South Korean Investors And Experts Eye Vietnam's Urban Transformation Pace

Why does Vietnam's urban development pace catch the attention of South Korean investors?

After experiencing one of the fastest urbanization processes in Asia, South Korean investors recognize a familiar rhythm of transition in Vietnam, but with a new scale and approach.

Not many countries understand the power of rapid urbanization as well as South Korea. According to the World Bank, South Korea's urban population ratio rose from about 40% in 1970 to over 81% in 2024. Dongtan is a prime example of a new city that was built from scratch in just six years, simultaneously establishing housing, schools, hospitals and a subway system.

This experience provided South Korean investors with a specific reference framework when observing Vietnam.

As of May 2025, South Korea is the largest foreign investor in Vietnam, with over US$92 billion in registered capital across 10,128 projects. Ko Tae-yeon, Chairman of the Korean Chamber of Commerce in Vietnam (KOCHAM), stated that investment decisions are made for the long term, so the stability and predictability of the legal framework serve as the foundation for building trust.

South Korean capital flows are also shifting from expanding quantity to upgrading quality, targeting sectors such as semiconductors, AI, green energy, data centers and smart cities. South Korea has promoted cooperation in urban development and high-speed rail in Vietnam, including a new city project following the South Korean model in Bac Ninh Province. From the position of a manufacturing hub, Vietnam is increasingly viewed as a landscape for new growth models and urban areas.

During this transition, the growth potential for urbanization, along with the creation and operational capabilities of domestic developers, becomes key factors for South Korean investors evaluating the market.

By May 2025, Vietnam's urbanization rate is projected to reach 44.3%. The goal for 2030 is to surpass 50%, with about 1,000 to 1,200 urban areas. The growth potential remains significant, but the requirements for infrastructure, living environments and developer responsibilities are also rising.

Vinhomes' nearly two decades of development have occurred alongside Vietnam's economic transformation phase. The company’s expansion is reflected in the process of upgrading its urban model from Royal City, Times City and Central Park in major city centers to Ocean Park, Smart City, and Grand Park in expanded urban areas. Housing is placed within a synchronized ecosystem comprising education, healthcare, commerce, entertainment and operational services.

At the same time, the Vinhomes project map partly reflects shifting demands in Vietnam. As income and life quality rise, the role of real estate developers expands from providing housing to creating living environments and new growth poles. To date, Vinhomes is operating 32 urban areas across 8 provinces and cities with approximately 650,000 residents.

Building on this foundation, Vinhomes Global Gate Ha Long and Vinhomes Green Paradise Can Gio represent the next stage of development. These two thousand-hectare megacities are envisioned as two new magnets in the North and South, combining inter-regional infrastructure, integrated ecosystems, and green, smart development standards. This direction is initially placed within an international measurement framework, as Green Paradise received the WCCD Custom ISO 37122 Provisional Certification, while Global Gate Ha Long targets the ISO 37125 standard.

For South Korean investors, the similarities lie in the integrated urban model, advanced infrastructure and relatively independent operational capabilities. Notable features of Vietnam are the project scale and the increasingly deep involvement of private enterprises. The rapid formation of megacities aiming for regional stature shows that the role of enterprises has expanded into creating new growth poles, contributing to shaping the national urban structure.

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