Frasers and Gelex have extended their cooperation into industrial (Source: Frasers)
Frasers Property is adding a second industrial joint venture to its business in Southeast Asia’s fastest growing economy as the company introduces a VND 6 trillion ($250 million) strategy to develop and operate warehouses and manufacturing space across northern Vietnam.
The Singapore-listed developer on Wednesday inked an agreement with Hanoi-based infrastructure investment firm Gelex Group to initially build more than 500,000 square metres (5.4 million square feet) of standard factories, warehouses and build-to-suit facilities on an unspecified 80 hectare (198 acre) site.
Gelex told Mingtiandi on Friday that the JV, in which Frasers holds a 51 percent stake while the Vietnamese firm maintains 49 percent ownership, will target key localities with good existing infrastructure in northern Vietnam, such as the provinces of Bac Ninh, Hung Yen, both located east of Hanoi, as well as the coastal province of Quang Ninh.
“We look forward to working with a like-minded partner like Gelex Group to expand our industrial portfolio and further develop our industrial capabilities,” Hua Tiong Lim, CEO of Frasers Property Vietnam, said in a statement. “We are confident that our quality industrial spaces developed to international specifications and catered to tenants’ business needs, will add value to Vietnam’s northern key economic zones.”
Long-term Partnership Eyed
Frasers said the new venture will develop projects under the Premium Estates brand that the company first introduced in Australia two years ago, featuring smart and sustainable industrial designs which also aim to provide healthy and productive workplaces for tenants. The projects will also be designed to align with international green building certifications.
Lim Hua Tiong of Frasers Vietnam
The Gelex representative said development will be conducted in phases, with some scheduled to commence construction this year.
“While doing our part for the low-carbon transition, we look forward to attracting higher value investments by bringing greater standards in industrial estates to Vietnam’s northern region with one-stop designs for build-to-suit solutions as well as ready-built factories and warehouses,” Lim said.
The partners said they are undertaking the venture in response to “significant international interest for more industrial space” in the region, especially requirements for international standard facilities.
The deal marks Frasers’ first industrial tiek-up with Gelex, an investment group listed on the Ho Chi Minh Stock Exchange with businesses ranging from manufacturing electrical equipment to infrastructure, including investments in commercial and industrial real estate across the country.
The two companies had previously worked together to develop two commercial projects in Hanoi’s Hoan Kiem district – the 306-key Melia Hotel on Ly Thuong Kiet Street and the adjoining 13,900 square metre Hanoi Central Office building.
“Gelex and Frasers Property Vietnam’s comprehensive relationship now and in the future provides momentum for further projects to grow together, particularly in establishing excellent industrial parks in Vietnam to fulfill the rising expectations of clients,” said Gelex chief executive Tuan Nguyen.
Partnership Expands
The latest partnership comes just one month after Frasers set up an office in Hanoi to complement its existing location in Ho Chi Minh City. The company completed the first phase of the Binh Duong Industrial Park outside the southern Vietnamese city last May as its first industrial venture in the city.
According to its 2022 annual report, Frasers had complete 40,360 square metres of ready-built facilities in its Binh Duong development by the end of last year. Frasers expects to complete about 100,000 square metres of leasable space in the project this year on the way to its goal of completing a 220,000 square metre project.
With the Binh Duong project estimated to have a total development value of about $180 million upon completion, warehouses and workshops are becoming a mainstay of Frasers’ Vietnam business.
“With this partnership (with Gelex), industrial will eventually become our biggest segment in Vietnam. In total, we now have approximately 190 hectares of space dedicated to industrial (use),” a Frasers spokesperson told Mingtiandi on Friday.
The representative noted that industrial projects, including logistics, now account for 33 percent of the developer’s total portfolio across eight markets in Asia, Australia and Europe.
Southeast Asia in Style
Frasers’ expansion in Vietnam tracks with bets by other regional and international heavyweights on Vietnam’s future as a centre for manufacturing and shipping, including Hong Kong-listed logistics giant ESR and US developer Hines.
In January, ESR announced that it would invest $207.8 million to purchase a nearly 11 percent stake in Ho Chi Minh City-based developer partner BW Industrial through a share placement. That deal also gives ESR the option to subscribe to additional shares and further increase its shareholding to at least 15 percent in the future.
Last October, Hines established its foothold in the country with the opening of an office located in Ho Chi Minh City, with the Houston-based developer said to be chasing industrial opportunities in the country.
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