Why Southeast Asia’s Lesser-Known Cities Are Gaining Global Investor Attention

The economic spotlight in Southeast Asia is beginning to shift. While powerhouse cities like Singapore, Jakarta, and Ho Chi Minh City have long been the region’s go-to investment destinations, a new wave of emerging urban centers is stepping up to share the stage.

Smaller, fast-developing cities such as Johor Bahru, Batam, Da Nang, and Ayutthaya are drawing increasing interest from international investors, thanks to government incentives, strategic locations, and modernizing infrastructure.

Second cities in ASEAN emerge as new global investment hotspots

A Regional Shift in Growth Strategy

This trend reflects a broader movement toward decentralization across the ASEAN region. According to experts, businesses are looking beyond overcrowded capitals to cities that offer more space to grow, easier regulatory environments, and targeted advantages like lower operational costs, strong logistics networks, and skilled local workforces.

Johor Bahru: A Strategic Neighbor to Singapore

Situated just across the border from Singapore, Johor Bahru is gaining traction as a business-friendly city. The recent launch of the Johor-Singapore Special Economic Zone (JS-SEZ) in 2025 has reinforced the city’s role as a cross-border trade and investment hub. With improved infrastructure and government support, Johor is now a compelling option for companies eyeing expansion in Southeast Asia.

Batam: Building Indonesia’s Digital Economy

Batam, located south of Singapore, is fast becoming a tech and manufacturing magnet. Its Special Economic Zone status and direct data cable links to Singapore have turned it into a favored site for data centers, semiconductor companies, and energy developers. A major milestone was reached with Apple’s $1 billion investment to manufacture AirTags locally—a testament to Batam’s growing digital potential.

Da Nang: Vietnam’s New Investment Magnet

Once best known for its beaches and tourism appeal, Da Nang is now carving out a new identity as a business hub. Positioned between Vietnam’s two largest cities, it benefits from key trade routes, modern ports, and international airport access. In early 2025, Da Nang was approved to pilot a Free Trade Zone, adding to its credentials as a future financial and logistics hub.

Ayutthaya: Thailand’s Industrial Revival

Ayutthaya, just north of Bangkok, is undergoing an industrial revival. It sits at the heart of Thailand’s push to become a high-tech manufacturing leader. Strong infrastructure, easy access to Bangkok, and proximity to the Thai-Sino high-speed rail under construction all support its ambitions. With government backing and growing private investment, Ayutthaya is being positioned as a future innovation and logistics hub.

Conclusion: Rethinking ASEAN’s Economic Map

These rising cities signal a fundamental shift in how Southeast Asia is distributing growth. As capital cities face pressure from limited space and rising costs, investors are looking toward alternative urban centers that offer scalability, efficiency, and smart policymaking.

In a rapidly changing global economy, second cities are emerging as first-rate opportunities.