Real estate giant ESR Group on Thursday said it has acquired a strategic equity stake in BW Industrial Joint Stock Company as the lead investor in a funding round, which is part of BW’s larger goal of raising up to $450 million. The company did not disclose the amount or stake it picked up.
Warburg Pincus-backed BW claims to be Vietnam’s largest and fastest-growing pure-play logistics and industrial developer with about $2 billion assets under management (AUM), including the country’s largest bank and the largest e-commerce and last-mile delivery logistics cluster in Ho Chi Minh City.
Since ESR and BW entered into a development joint venture for the 240,000-square-metre My Phuoc 4 project which marked ESR’s maiden entry into Vietnam in 2021, both parties have worked on multiple projects.
ESR will be appointing a board member at BW. ESR’s head of investment and development for Southeast Asia, Fion Ng, is moving to BW as its chief operating officer.
Jeffrey Shen and Stuart Gibson, ESR co-founders and co-CEOs, said, “ESR’s strategic investment in BW marks a significant milestone for our business in Southeast Asia. Vietnam is witnessing robust demand for logistics and industrial space with limited
available modern space.”
In fact, ESR divested a record $1.4 billion of its balance sheet investments (primarily in China) in H1 2022, which recycled over $1 billion of net cash to the group. ESR said its focus on Vietnam was because the country has been one of the most resilient economies through the COVID-19 pandemic and one of the few globally to record positive GDP growth in both 2020 and 2021.
Lance Li, CEO, BW, said: “We are delighted to mark a new milestone for BW, and we are excited to build on our existing strategic relationship with ESR.”
Like BW, ESR was co-founded by US private equity major Warburg Pincus. BW CEO Lance Li earlier served as vice-president of mergers and acquisitions and international business at ESR China.
BW will be competing with other global players like Sydney-based Logos Property and Singaporean logistics titan GLP for a share of the Vietnamese real estate pie.
Logos Property is currently building a 80,000-square-metre warehouse facility, valued at about $70 million. And Singapore logistics giant GLP has acquired three sites in Vietnam with plans to develop 210,000 square metres of logistics facilities alongside local affiliate SEA Logistic Partners.