Country keeps pace with modern industrial property

More ready-built factories and warehouses are being made available Photo: Le Toan

BW Industrial, a logistics property developer aided by Warburg Pincus, is continuing to explore the Vietnamese market with the construction of BW Phu An Thanh Industrial Hub in December, its 13th venture of the year.

The ready-built factory spans about 54,000sq.m, making it a convenient site for manufacturers across sectors such as vehicles, electronics, electrical equipment, food and beverages, and machinery.

BW Industrial has also unveiled its plan for an initial public offering in Vietnam. COO of BW Industrial Vietnam Fion Ng said the idea was an avenue the company was pursuing, but the timing will depend on market conditions, she told Bloomberg. Leases in 2024 were up by half on 2023 and the company is on track to lease 1.2 million sq.m of industrial and logistics space in 2024.

“We are looking to keep pace with construction of a million sq.m of industrial leasing land a year and are not slowing our investment,” Ng added.

BW Industrial was founded in 2018 as a joint venture of Becamex IDC and Warburg Pincus to develop for-rent logistics property in Vietnam. The company has more than 10 million sq.m of land in 12 cities and provinces, according to its website.

More registered capital

In October, Thantawan Industry Public Co., Ltd., a Thai manufacturer of premium plastic packaging, signed a landmark 30-year lease for a factory in Phuoc Dong Industrial Park (IP) in the southern province of Tay Ninh. The new facility spans more than 43,000sq.m and features a state-of-the-art factory. Purpose-built for advanced virgin plastic packaging production, the facility is designed with a production capacity of 9,000 tonnes annually.

Elsewhere, Daiwa House Logistics Trust Company in July completed a deal to acquire Tan Duc 2 in the Mekong Delta province of Long An for $26.5 million, marking its first time owning real estate in Vietnam.

Daiwa House Logistics Trust explained that this acquisition is its first outside Japan and will help to diversify its portfolio. Tan Duc 2 is a built-to-suit property developed as a cold storage facility for storage of frozen and chilled food.

“Such cold storage facilities are currently experiencing a shortage in Vietnam, where demand is bolstered by the demand for high-quality food products driven by Vietnam’s growing middle-class and improving economy and the strong domestic demand for such food products coupled with a growing e-commerce sector are some of the key drivers for the development of the cold storage sector in Vietnam,” Daiwa House said.

In May, Tripod Technology Group of Taiwan leased 18ha of land in Chau Duc IP in Ba Ria-Vung Tau province, also in the south, with registered capital of $250 million, to build a factory to produce electronic circuit boards. Once operational, the factory expected to be the largest high-tech foreign-invested undertaking in the Sonadezi Chau Duc IP, employing 1,700 workers.

Before that, in March, Singaporean fund Mapletree Logistics Trust (MLT) spent more than $50 million to acquire two Grade A warehouses in Binh Duong and Hung Yen provinces, located adjacent to Ho Chi Minh City and Hanoi.

The company said the move also included the acquisition of a property in Malaysia for around $117 million. Together, the move would total approximately $174 million, increasing MLT’s portfolio in Vietnam by 21 per cent to over 70ha. Before this move, MLT’s portfolio in Vietnam included five properties in Binh Duong province and five in the northern province of Bac Ninh.

According to Bui Trang, country head of Cushman & Wakefield Vietnam, the total value of real estate merger and acquisition (M&A) transactions in Vietnam since 2020 has reached $2.94 billion, of which industrial real estate led the way with a rate of 40 per cent. “Only calculating M&As in the first 9 months of 2024, industrial real estate accounts for 91 per cent of the total transaction value of $178 million,” Trang added.

Domestic firms on board

While foreign business groups are promoting M&As to expand available land, domestic businesses are proposing to invest in new IP projects.

Viglacera Corporation is preparing for approval of policies to deploy new IPs in localities with advantages in infrastructure and business capabilities. Specifically, it will establish new legal entities and branches to develop Phu Ninh and Bac Son IPs in Phu Tho province, Dong Mai IP in Quang Ninh province, and Tay Pho Yen IP in Thai Nguyen.

It is expected that in 2025, Viglacera will record an increase in IP land of 2,000-3,000ha.

Meanwhile, urban and industrial developer IDICO said that it aims to add around 2,000ha of IP land to its portfolios soon.

In September, the corporation was approved for the expanded My Xuan B1-CONAC IP located in Ba Ria-Vung Tau province. In the same month, IDICO was approved to invest in Tan Phuoc 1 IP in Tien Giang province.

Meanwhile, Phat Dat Corporation is researching for land and implementing IPs in Quang Ngai, Binh Duong, Dong Nai, Ba Ria-Vung Tau, and Dong Thap provinces.

Cushman & Wakefield forecasts that industrial real estate supply will grow significantly over the next two years. Specifically, for provinces in the northern and southern key economic regions, the supply of industrial land will increase by over 10,000ha, with a growth rate of 7.5 per cent per year.

Meanwhile, ready-built factories and warehouses will increase by 1.9 million sq.m and 2.6 million sq.m of floor space, respectively, growing by 5.9 per cent per year and 10.1 per cent annually.

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