Actis Sells Industrial Park to Exit First Vietnam Real Estate Investment

London-based fund manager Actis has sold its remaining interest in an industrial park in northern Vietnam to its local joint venture partner, exiting its first-ever real estate investment in the Southeast Asian nation.

Actis completed its sale of the 49-percent stake in the 180-hectare (445-acre) An Phat 1 Industrial Park in Hai Duong province, halfway between Hanoi and the port city of Haiphong, to its joint venture partner, An Phat Complex, the property arm of plastic manufacturing group An Phat Holdings (APH).

The recently completed industrial park was the British investor’s maiden real estate investment in the country with Actis having committed $20 million to the project in June 2021. While the total consideration for the sale was not disclosed, the British investor said in a statement this week, that it has “outperformed in both returns and exit time frame.”

“Vietnam is a strategic market for us as it offers great opportunities for cost-effective manufacturing and supply-chain diversification,” Brian Chinappi, partner and real estate head at Actis, said. “We have formed an excellent partnership with An Phat Holdings, which has strong operational capability and a comprehensive business ecosystem to support An Phat 1 IP.”

More Projects Eyed

Designed as a sustainable, high-tech industrial park, An Phat 1 is expected to house 50 to 70 manufacturing plants and warehouses once fully operational. So far, two major suppliers of iPhone maker Apple have already found homes in the complex, according to the announcement.

Actis said the project was completed ahead of schedule and has since yielded “significant construction and operating cost savings” for the partners.

Troy Griffiths, deputy managing director at Savills Vietnam, said the industrial real estate market in Hai Duong province has “performed particularly well” thanks to its connection to Haiphong, as well as the opening of a new freeway which caused land values in the area to “appreciate substantially.”

In the first half of 2023, industrial parks in northern Vietnam were 83 percent occupied on average with monthly rents at $4.8 per square metre for ready-built factories, according to Savills.

Chinappi said Actis is planning to maintain its partnership with An Phat for future projects.

Aside from the initial investment in the project two years ago, Actis and An Phat in 2021 formed a separate partnership to develop ready-built factories and warehouses for lease at a total investment of up to $250 million.

“This collaboration has helped to enhance the reputation of An Phat Holdings in the industrial park real estate industry and has also improved the company’s management capabilities in this segment,” Duong Pham, chairman of An Phat Holdings said in this week’s announcement. “We are actively seeking out opportunities to collaborate with Actis and other foreign partners to undertake larger industrial park real estate projects in the near future.”

No update on the 2021 partnership was made available to the public so far, while representatives from the two companies had not responded to media queries as of writing.

An Phat is a major manufacturing company in Vietnam and specialises in environmentally friendly production of plastics. The group’s business ranges from manufacturing, packing and engineering to industrial real estate.

Betting on Supply Chain Reshuffling

Following the exit, Actis said it continues to invest in well-located assets in Vietnam benefitting from ongoing supply chain diversification which has helped the country become a favoured destination for global and regional manufacturers.

“Our investments focus on the four global themes: digitalisation, supply-chain transformation, health and wellness; and climate transition,” Chinappi said, adding that these trends are supported by demographic shifts and insufficient supply as well the ongoing evolution of investment yields worldwide.

Bullish on Asia

With over $12 billion in assets under management globally, Actis has been ramping up its presence in Asia’s emerging markets in recent months.

Last month, the fund manager said it plans to invest as much as $2.5 billion in India over the next four years, targeting projects across the country’s energy transition, digital infrastructure, logistics and warehousing sectors, according to media reports.

The company is also looking to invest $700 million to build and operate life science assets in the country, according to separate press accounts.

Actis in April of last year hit a $700 million final closing for its 2019-vintage Actis Asia Real Estate Fund 2, which aims to invest in new economy assets across emerging markets in the region.