GLP Launches Vietnam JV with Trio of Warehouse Projects

Asia’s largest warehouse builder has become the latest industrial player to bet on Vietnam as GLP today announced its acquisition of a trio of projects in the Southeast Asian nation.

In a statement together with SEA Logistic Partners, a Ho Chi Minh City-based startup co-founded by the company’s former China president Kent Yang, GLP revealed that the two companies have set up a joint venture to invest in and develop logistics properties in Vietnam, as the fast-growing Southeast Asian country continues to draw attention from investors.

“Within Southeast Asia, Vietnam is one of the most attractive markets given its population dynamics, growing economy and middle class which support domestic consumption,” Ming Mei, co-founder and CEO of GLP said in a statement.

GLP’s new venture, which has already secured sites in both northern and southern Vietnam, was first reported by Mingtiandi in August of this year, and has been formally announced less than two months after rival shed builder Logos Property revealed its own entry into the rapidly industrialising nation.

Targetting Vietnam’s Largest Cities

With Yang having formally begun work with SLP since May of this year, according to his LinkedIn profile, the company’s joint venture with GLP has already acquired two sites in northern Vietnam and a third near Ho Chi Minh City in the south, with plans to develop 210,000 square metres (2.26 million square feet) of logistics facilities.

The JV’s 80,000 square metre SLP Park Bac Giang project, located 60 kilometres (37.3 miles) northeast of Hanoi, has already received a pre-lease commitment for half of its space from Jusda, a logistics provider spun off from electronics maker Foxconn last year, the companies said.

The new venture’s second northern Vietnam project is SLP Park Bac Ninh – halfway from Hanoi to Bac Giang in Bac Ninh province. Sydney-based Logos also chose Bac Ninh for its first Vietnam project, with the ARA Asset Management-backed firm announcing last week that it plans to build an 80,000 square metre facility in Sembcorp’s Vietnam Singapore Industrial Park (VSIP) along National Highway 1A.

The two companies said that their initial efforts in Vietnam will focus on developments around Hanoi and Ho Chi Minh City, the country’s two largest cities, with the third project, SLP Park Long Hau, located in Long An province around 17 kilometres south of the southern commercial hub.

GLP and SLP declined to reveal financial details of their Vietnam acquisitions, which cover a total site are of 335,000 square metres.

In addition to new development, the joint venture partners said they will look for opportunities to acquire existing assets, while expressing confidence that GLP’s expertise in fund management, development and operations, as well as the company’s global customer network, would support expansion of the new enterprise.

Supporting Vietnam’s Online Economy

In explaining the decision to set up in Vietnam, SLP’s Yang, who worked in China from 2005 through 2016, pointed to the country’s expanding middle class and increasingly online lifestyle.

“Many Vietnamese are digital consumers, spending approximately seven hours a day online,” Yang said. “These factors and trends have made online shopping more accessible to a larger portion of the population and is driving demand for more efficient and more modern logistic warehouses in the country.”

Yang set up SLP together with co-founder Chih Cheung, a board member of Hong Kong consumer goods firm Li & Fung and venture capitalist. Li & Fung delisted from the Hong Kong exchange earlier this year after the family controlling the company teamed up with GLP in HK$7.2 billion ($930 million) privatisation.

In addition to the logistics investments by GLP and Logos, some of the world’s largest investors have been pursuing real estate opportunities in Vietnam in recent months. In June of this year a consortium led by New York private equity firm KKR agreed to pay $650 million to buy a minority stake in Vinhomes, a publicly-listed residential developer in Vietnam, with Singapore’s Temasek Holding also joining that acquisition.