ESR Buys Stake in Vietnam Developer BW Industrial

BW’s My Phuoc 4 Industrial Park was developed along with ESR

Fund supervisor ESR is shopping for into the Vietnam progress story by taking an fairness stake in its native companion BW Industrial as a part of a funding spherical which may increase as much as $450 million for the Ho Chi Minh Metropolis-based shed developer.

“ESR’s strategic funding in BW marks a major milestone for our enterprise in Southeast Asia,” ESR co-founders and co-CEO’s Jeffrey Shen and Stuart Gibson stated in an announcement on Thursday. “Underpinned by robust progress fundamentals together with speedy urbanisation, a fast-rising shopper class and the exponential progress of e-commerce, Vietnam is witnessing strong demand for logistics and industrial house with restricted obtainable fashionable house.”

The fairness funding was introduced 21 months after Hong Kong-listed ESR fashioned a three way partnership with BW to develop an industrial park exterior of Ho Chi Minh Metropolis, with each corporations having US non-public fairness big Warburg Pincus as main backers.

Whereas the assertion didn’t present particulars of how the brand new funding can be deployed, or relating to how giant of a task ESR performed within the financing spherical, BW at the moment has a number of amenities beneath improvement in each Hanoi and HCMC, because it seeks so as to add to what the corporate phrases Vietnam’s first and largest e-commerce and last-mile supply logistics cluster across the southern mega-city.

Accelerating Trajectory

“We’re excited to companion with ESR the place we are able to leverage our collective sources, expertise, and relationships to cement our market main place,” stated BW chief government Lance Li. “Trying ahead, we’ll proceed to discover additional collaborations, both greenfield developments, acquisitions or joint ventures to speed up our progress trajectory going ahead.”

Stuart Gibson of ESR

Established as a three way partnership between Vietnamese state-owned builder Becamex IDC Corp and Warburg Pincus in 2018, BW now has round $2 billion in gross property beneath administration and markets itself because the nation’s largest and fastest-growing pure-play logistics and industrial developer.

Li, who served as vice chairman of mergers and acquisitions and worldwide enterprise at ESR China earlier than taking up the highest position at BW two years in the past, added that, “With the transformative shift of the manufacturing base to Vietnam in addition to the rise of home consumption particularly by way of e-commerce, BW is extremely properly positioned to ship the crucial New Economic system infrastructure to assist the long-term progress of Vietnam.”

Specialising in normal factories and warehouses that develops round Vietnam’s main cities, the five-year-old agency has a land financial institution of greater than 8 million sq. metres and greater than 2 million sq. metres of gross ground space in operation or beneath improvement. Along with the recent backing from ESR, BW stated it’s also gaining new money from different companions within the funding spherical, with out specifying names.

Over 85 % of the corporate’s property are in both HCMC or Hanoi, and BW is claimed to have established relationships with near 200 tenants from over 20 international locations, most of that are from the e-commerce, last-mile supply or high-tech manufacturing sectors.

Vietnam on the Rise

ESR’s funding in BW marks the renewal of worldwide commitments to Vietnam’s industrial sector after a Covid-19 interruptions within the final two years, as warehouse builders compete to serve producers relocating from China and to leverage the nation’s fast-growing economic system.

“As we proceed to increase ESR’s main New Economic system footprint in APAC, Vietnam will likely be an vital and invaluable market because it gives a quick and dynamic rising economic system, scale, velocity of improvement and powerful institutional investor curiosity,” ESR’s Gibson and Shen stated.

Of their three way partnership with BW introduced in Could 2021, ESR is creating the My Phuoc 4 Industrial Park in Binh Duong province close to Ho Chi Minh Metropolis. That 240,000 sq. metre (2.6 million sq. foot) undertaking is already leasing each logistics and lightweight manufacturing amenities.

Vietnam was one of many few economies globally which notched optimistic GDP progress by means of the pandemic in each 2020 and 2021, as producers continued to look to the nation’s younger inhabitants and low labour prices for a substitute for China. Disbursements of international direct funding in Vietnam in the course of the first 9 months of 2022 had been up 16.2 % in comparison with the identical interval a yr earlier to succeed in a file $15.4 billion, in keeping with figures from the nation’s Ministry of Planning and Funding.

With the gross merchandise worth of the nation’s e-commerce market anticipated to develop at compounded annual progress charge of 32 % from 2021 by means of 2025, when it’s projected to succeed in $39 billion, in keeping with the World Financial institution, warehouse builders have been wanting to develop their operations in Vietnam.

In February final yr ESR’s Logos unit teamed with Manulife Funding Administration to buy a distribution centre in Dong Nai province, north of HCMC, which was valued at greater than $80 million.

ESR’s archrivals at GLP have additionally been lively in Vietnam, organising their SEA Logistics Companions three way partnership within the nation, which broke floor on its first facility in 2021 within the northern port metropolis of Haiphong.