A Warburg Pincus-led consortium has completed a $250-million investment in No Va Land Investment Group JSC (Novaland), a key member of NovaGroup, one of the leading developers in Vietnam, according to an announcement.
The move is consistent with Warburg Pincus’s approach of backing best-in-class local partners in the market and marks the beginning of a strategic partnership with Novaland, a Warburg statement said.
However DealStreetAsia understands that the transaction is a financing deal and the firm would not be taking a direct ownership stake in Novaland.
Novaland will use the proceeds to continue to expand its strategic land bank and complete the development of ongoing flagship projects.
The transaction, which is the sixth in Vietnam, further reinforces Warburg Pincus’ long-term commitment to the country.
Through this collaboration, Novaland’s strong existing market position in the real estate sector – as exemplified by its excellent track record of development and sales, access to a sizeable land bank and proven execution capabilities – will be complemented by Warburg Pincus’ global real estate experience and expertise.
“Warburg Pincus’ proven track record of supporting successful real estate businesses in Vietnam and Asia will be valuable to us,” Novaland Chairman Bui Xuan Huy said in a statement.
“This investment further reinforces our strong commitment to Vietnam. With its continued urbanisation, emerging middle class and an increasingly more diversified economy, Vietnam is poised for significant growth in the coming years,” said Jeffrey Perlman, managing director and head of Southeast Asia and Asia-Pacific real estate at Warburg Pincus.
Since 2013, Warburg Pincus has invested over $1.5 billion of equity capital into several of Vietnam’s leading businesses, including Vincom Retail (which was fully exited in 2019); logistics and industrial developer BW Industrial Development; homegrown integrated hospitality platform Lodgis Hospitality; joint-stock commercial lender Techcombank; and fintech platform MoMo.
Novaland, meanwhile, is one of the leading real estate developers in Vietnam. It has developed more than 50 real estate projects, with a diverse range of products both being implemented and in operation, including apartments, shop houses, officetel, second homes and branded villas.
The group’s land bank under possession and under research totals approximately 10,600 ha, for development in three key product suites, including residential real estate in central Ho Chi Minh City and neighbouring provinces, hospitality real estate in major tourism destinations and industrial real estate.
Credit Suisse acted as the sole financial advisor to Novaland.