Warburg Pincus Leads $250M Financing for Novaland Vietnam Projects

Warburg Pincus has led a $250 million investment backing a pipeline of projects being developed by Vietnam’s Novaland, cementing its reputation as the largest private equity investor in the fast-growing Southeast Asian nation.

In an an announcement to the Ho Chi Minh City Stock Exchange (HOSE) on 27 May, Novaland Investment Group Joint Stock Co said that it had sold convertible bonds worth $250 million to an entity controlled by Warburg Pincus and to the Singapore branch of Credit Suisse AG, which has been identified as a partner in the investment with the US private equity giant.

“We are very excited about the opportunity to invest in yet another leading Vietnamese business and look forward to collaborating with NovaGroup’s and Novaland’s high calibre management team,” said Jeffrey Perlman, managing director and head of Asia Pacific real estate and Southeast Asia for Warburg Pincus. “We are confident in Novaland’s ability to capitalise on the attractive market opportunity and we will leverage our network, experience and expertise to help Novaland take its business to the next level.”

This latest commitment brings Warburg Pincus’ investments in Vietnam to $1.5 billion over nearly a decade and comes just six months after the New York-based firm closed its first-ever strategy for the Asian real estate sector with $2.8 billion in fresh equity

Pipeline Boost

The fresh cash will be used to acquire land and complete existing projects, according to a statement by Novaland. While the company did not provide details on projects or locations, it did point to its goal of “leveraging upcoming infrastructure in Vietnam’s southern region.” Credit Suisse acted as the sole financial advisor to Novaland on the investment.

Novaland currently has 10,600 hectares (26,193 acres) in its land bank for planned developments including residential properties in central Ho Chi Minh City and neighbouring provinces, as well as industrial parks and hotels in major tourism locations.

“We are delighted to welcome Warburg Pincus as an important strategic partner,” said Novaland chairman Bui Xuan Huy. “Warburg Pincus is one of the most established and successful private equity investors in the world, and their sizable investment into Novaland shows the strong confidence they have placed in Novaland’s growth potential.”

Among Novaland’s ongoing projects are the mixed-use Grand Sentosa development in Ho Chi Minh City that held its groundbreaking in February, and the NovaWorld Phan Thiet tourism complex in Binh Thuan province – a 1,000  hectare development slated to open next year.

After developing more than 50 real estate projects across sectors spanning apartments, shop houses, vacation homes, and branded villas, the Vietnamese firm said it aims to expand its footprint to 30 provinces nationwide by 2030.

Southeast Asia Focus

The project financing marks the sixth investment that Warburg Pincus has made since it entered Vietnam in 2013, following its earlier partnerships with retail development platform Vincom Retail – which it exited in 2019 – logistics specialist BW Industrial, hotel investment platform Lodgis Hospitality, commercial bank Techcombank and fintech app MoMo.

With $80 billion in assets under management globally, Warburg Pincus has invested at least $3 billion in funding across Southeast Asia since 2019 with Vietnam commitments accounting for half of the total.

“With its continued urbanisation, emerging middle class and an increasingly more diversified economy, Vietnam is poised for significant growth in the coming years,” Perlman said.

Southeast Asia is among the areas of focus for Warburg Pincus’s first pan-Asia strategy, alongside mainland China, Japan, Korea and Australia.