Amid the ongoing global economic uncertainties, Vietnam had attracted new FDI this year in excess of $20 billion as of September, up 4.5 per cent year-on-year, which indicates that the country’s appeal to international investors has not diminished. Market experts are increasingly optimistic about industrial real estate, as the recovery of manufacturing activities is expected to fuel demand for facility rentals in industrial parks. Successfully capturing the opportunities arising from production shifts as well as the booming e-commerce market, the BW Industrial Development JSC (BW) has posted tremendous growth in the last five years to emerge as the country’s leading industrial real estate platform.

BW was founded in 2018 as a joint venture between the Becamex IDC Corp., Vietnam’s largest industrial real estate developer, and Warburg Pincus, a leading global private equity firm that recently celebrated its tenth anniversary of investing in Vietnam. In a bid to further accelerate growth and consolidate its leading position in the market, in the first quarter of this year, BW brought in the Hong Kong (China)-listed real estate giant the ESR Group as its lead strategic investor as part of a primary fundraising round of up to approximately $450 million that also included other leading investors in Asia.  

Leveraging the strengths of the three blue-chip investors, BW is well-positioned to capture the tremendous growth in Vietnam’s logistics and industrial real estate sector, which offers significant opportunities driven by favorable macro tailwinds and an underserved market.

According to experts, the country continues to be one of the top economies in Southeast Asia, with its robust macro-economic fundamentals and strategic policies. Furthermore, Vietnam’s fast-growing economy is underpinned by a thriving digital economy, a burgeoning middle class, and a young and dynamic workforce.

With the e-commerce market, the engine of Vietnam’s digital economy, expected to grow at more than 20 per cent CAGR to 2025, according to the e-Conomy SEA 2023 report, e-commerce-dedicated logistics space in Vietnam clearly has the potential to grow more than 2 million sq m in the near to mid-term to meet the rising demand, BW has observed.

While inquiries from global manufacturers and e-commerce players have been growing rapidly, by 75 per cent since the beginning of this year, Vietnam is currently faced with limited supply to accommodate the anticipated surge in operational demand and new trends in the field of warehousing logistics.

Mr. Lance Li, CEO of BW, remarked that Vietnam is significantly underserved in terms of its modern warehouse supply, especially institutional-grade warehouses. In its current stage, the per capita modern warehouse stock in the country is a mere fraction of that of neighboring countries like China and South Korea. “The modern warehouse industry, therefore, enjoys favorable tailwinds, driven by outsized opportunities in manufacturing, increasing domestic consumption, the rapid growth of e-commerce, and trade activities that are outpacing regional peers,” he said.

Significant strides

BW has posted strong results over the last five years owing to favorable factors that have opened up ample space and numerous possibilities, cementing its position as Vietnam’s top industrial logistics real estate platform. It owns a remarkable portfolio that comprises over 8.5 million sq m of industrial land in prime locations across 40 projects in eleven key cities and provinces in Vietnam, with over 3 million sq m of gross floor area (GFA) of completed or under-construction properties.

As a developer, BW has demonstrated incredible speed in executing its projects. As of November, the company had successfully completed nine of the ten projects slated to be launched by December 2023. Additionally, it has pioneered the market in terms of leasing performance. Its properties are leased to both local and global tenants through its vastly experienced and multilingual sales force, with successful pre-leasing and high occupancy. Of particular note are projects in the northern region, which have recorded almost full occupancy rates.

Since its inception, BW has developed entrenched relationships with close to 250 high-quality tenants from over 20 countries and territories, the majority of which are e-commerce, last-mile delivery, and resilient high-tech manufacturing players such as Shopee, BEST Inc., 7-Eleven, HKC, Chervon, and RPAC.

Among product types offered by BW, ready-built-factory (RBF) is vastly occupied by electronics manufacturers, which indicates that Vietnam’s manufacturing industry is moving up the value chain. While RBF accounted for a bigger share among products, ready-built-warehouse (RBW) has recorded a faster annual growth rate in the past three years.

As of the first quarter of 2023, BW had secured equity commitments of more than $1 billion from its investors and partners and has formed strategic partnerships with leading global manufacturers and e-commerce and logistics players to serve one of the fastest-growing markets in Asia.