Just two months after establishing a joint venture to expand its Asia Pacific logistics network into Vietnam, Logos Property has acquired its first site in the fast-growing Southeast Asian nation, according to an announcement today.
The Sydney-based warehouse specialist has chosen a plot outside of Hanoi to start building its first distribution centre in the country, with plans to develop a facility spanning up to 80,000 square metres (861,113 square feet) of warehouse space that it expects to have an asset value of $70 million upon completion.
“We are pleased to have acquired our first development site, having spent the last two years assessing the local market and following the establishment of our Vietnam venture in August,” said Logos’ head of Vietnam Glenn Hughes in a statement.
With Vietnam benefiting from a trend among manufacturers to diversify their production beyond mainland China, Logos has said that it aims to have up to $2 billion in assets under management in the country within the next three to five years.
Joining an Industrial Cluster
Logos, which was acquired by Singapore’s ARA Asset Management early this year, officially entered Vietnam in August with the announcement of a $350 million joint venture with an unspecified institutional investor believed to be GIC.
For its first project under its new JV, Logos has selected a site in Sembcorp’s Vietnam Singapore Industrial Park (VSIP) along National Highway 1A in Bac Ninh province. That location keeps Logos new sheds in close company with facilities from major international logistics providers including FM Logistic, Emergent Cold, LinFox and DB Schenker.
“We believe the property is well suited to service the growing demand from international and local logistics operators within the greater Hanoi region and are confident we can set a new benchmark for the Vietnam logistics market in terms of high-quality logistics buildings to meet this demand,” Logos’ Hughes said.
The Sydney-based firm says it will develop the property on both a speculative and build-to-suit basis and has indicated that it is currently in discussions with a number of its existing customers regarding the project, as well as having talks with prospective new tenants.
Located just over 24 kilometres (15 miles) northeast of Hanoi’s Hoan Kiem Lake, the project is within 35 minutes of Noi Bai international airport and an hour and a half away from northern Vietnam’s largest port at Haiphong.
Capturing China’s Overflow
Logos, which already has some 100 logistics estates established across nine APAC countries, is set to break ground in northern Vietnam as the country benefits from a wave of manufacturer interest in Southeast Asian opportunities.
“Manufacturers from Korea, Japan and western multinationals are expanding beyond China and Vietnam is one of the primary beneficiaries of this,” said Stuart Ross, head of industrial for Southeast Asia at JLL.
Having already established a network of distribution centres in nine locations across China, the company is well positioned to extend its customer relationships into Vietnam after previously setting up facilities in India, Singapore and Indonesia.
“They are able to expand based on customer demand and are one of the first international logistics players to get set up there,” JLL’s Ross added.
Also gaining a foothold in Vietnam this year was Singapore-based giant GLP, which has invested in SEA Logistics Partners, a Ho Chi Minh City warehouse development and fund management platform established by former GLP China president Kent Yang and Li & Fung board member Chih Cheung.