A major shift in global manufacturing is underway as companies actively diversify their supply chains beyond China, a strategy now widely known as 'China plus one'. This trend is channeling billions in foreign investment into new industrial hubs, with Southeast Asian nations like Thailand and Vietnam emerging as primary beneficiaries alongside key markets in Eastern Europe.
In the first half of this year alone, Thailand reported a 132% surge in foreign direct investment applications, while Vietnam saw a 33% rise in total registered foreign investment. This capital influx is directly fueling the expansion of industrial real estate, creating significant opportunities for companies positioned to meet the growing demand for modern manufacturing and logistics facilities.
Key Takeaways
- The 'China plus one' strategy is accelerating as companies reduce reliance on a single market due to geopolitical tensions and rising costs.
- Thailand and Vietnam are experiencing a dramatic increase in foreign direct investment (FDI), with growth of 132% and 33% respectively in early 2025.
- Industrial real estate developers in these regions, such as Amata Corporation, are capitalizing on the demand for new manufacturing facilities.
- Eastern Europe is also benefiting from a similar 'nearshoring' trend, with firms like CTP NV seeing increased leasing from Asian manufacturers moving closer to European consumers.
- Investment funds are now strategically targeting companies that facilitate this global supply chain realignment.
The Great Manufacturing Migration
For decades, China stood as the undisputed factory of the world. However, a combination of geopolitical friction, escalating operational costs, and vulnerabilities exposed by the COVID-19 pandemic has prompted multinational corporations to rethink their manufacturing footprint. The result is the 'China plus one' strategy, a risk-mitigation approach where companies maintain a presence in China while establishing additional operations elsewhere.
This is not a complete exodus but a strategic diversification. The goal is to build more resilient and geographically distributed supply chains. Southeast Asia has become a natural destination due to its proximity to China, competitive labor costs, and a large workforce.
What is 'Nearshoring'?
A parallel trend, particularly relevant in Europe, is 'nearshoring'. This involves relocating manufacturing and other business processes to countries that are geographically closer to the end consumer. For European markets, this often means moving operations to Central and Eastern Europe to shorten supply chains, reduce transport costs, and navigate regional trade agreements more easily.
Southeast Asia's Investment Surge
The numbers from the first half of 2025 paint a clear picture of this global shift. Thailand's 132% increase in FDI applications is largely driven by companies from China looking to establish new high-tech manufacturing bases for products like electric vehicles, data centers, and smart electronics.
Much of this new capital is flowing into Thailand’s Eastern Economic Corridor (EEC), a development zone offering advanced logistics infrastructure and government incentives. A key player in this area is Amata Corporation, a Thailand-based company specializing in developing and managing large-scale industrial estates.
Amata Corporation at a Glance
- Operates major industrial estates in Thailand's EEC and Vietnam.
- Has seen earnings increase by 20% annually over the last three years.
- Recurring income from utilities and services now makes up about 50% of its earnings.
- Currently offers investors an approximate 6% dividend yield.
Founded in 1989, Amata provides turnkey solutions for manufacturers, including infrastructure, utilities, and support services. The company has been active in Vietnam since 1994, where it manages four industrial estates covering over 7,000 acres. This dual-country presence positions it perfectly to capture investment flowing into the region.
Europe's Eastern Corridor Heats Up
While Southeast Asia captures headlines, a similar rebalancing is happening in Europe. CTP NV, a Netherlands-based developer of industrial real estate, is a prime example of a company benefiting from the 'nearshoring' movement.
CTP owns and manages a vast portfolio of 13.5 million square meters of industrial property, primarily located in Central and Eastern Europe. The company recently highlighted that leasing to Asian-headquartered customers has doubled, now accounting for 20% of its leasing activity compared to 10% previously. This indicates a strong desire from Asian manufacturers to establish a foothold closer to European consumers.
The company's management has noted that strong tenant demand and limited competition are driving high returns, pointing to a 16% return on equity. In response, CTP has raised its growth targets, projecting potential mid-teens earnings per share growth over the next five years. The company also has a significant pipeline, with 2 million square meters under development and a land bank that could support another 13 million square meters of future projects.
An Investor's Perspective on the Trend
This global realignment has not gone unnoticed by institutional investors. Funds like the Third Avenue International Real Estate Value Fund are actively seeking out companies that are well-positioned to benefit from these long-term structural trends. Their recent investment in Amata Corporation highlights this strategy.
According to the fund's analysis, Amata's shares were acquired at an attractive valuation, trading at approximately half of its conservative net asset value and at a 6 times price-to-earnings ratio, well below its ten-year average of 12 times. This discount was attributed to market uncertainty surrounding U.S. trade policy.
However, investment managers believe the underlying structural shift of 'China plus one' is a more powerful and enduring driver than short-term policy concerns. The increasing diversification of income streams at companies like Amata, where recurring revenue now constitutes half of earnings, also reduces investment risk.
By investing in both CTP in Europe and Amata in Southeast Asia, investors are building exposure to the two primary geographic beneficiaries of this global supply chain reorganization. This strategy demonstrates a conviction that the movement to diversify manufacturing is a foundational economic shift that will shape industrial real estate markets for years to come.
