Warburg Boosts Logistics Bet With $200 Million Vietnam JV

(Bloomberg) -- Warburg Pincus, the private equity firm that’s been betting on the growth of the Asian logistics sector, is forming a joint venture to develop industrial properties in Vietnam.

The New York-based firm and Vietnam’s Investment & Industrial Development Corp., the state-owned firm known as Becamex IDC, are committing more than $200 million to the partnership, Warburg Pincus said in an emailed statement Monday, confirming an earlier Bloomberg News report.

The venture, called BW Industrial Development JSC, will use the capital to develop and operate modern warehouses and factories in key economic and industrial zones, according to Jeffrey Perlman, head of Southeast Asia at Warburg Pincus. It could also target industrial-related properties including research centers, flex office space and data centers, he said.

“With the transformative shift of the manufacturing base from markets like China to Vietnam as well as with the rapid rise of domestic consumption, the logistics and industrial real estate market in Vietnam is in the ‘early innings’ and at an inflection point for outsized growth,” Perlman said in the statement.

The Asian Development Bank forecasts the nation’s economy will expand 6.7 percent this year, the second highest growth among Southeast Asian countries, trailing only the Philippines.

Warburg Pincus has invested in Hong Kong-based logistics firm ESR, as well as Indian developer Embassy Industrial Parks and China package delivery firm ZTO Express Cayman Inc. In 2013, the firm led a consortium that bought 20 percent of mall operator Vincom Retail JSC, which was its first deal in Vietnam. Vincom Retail completed an equity offering last year that ranks as the country’s biggest first-time share sale, data compiled by Bloomberg show.

Becamex, which is owned by the government of Binh Duong province, was set up in 1976. The company develops industrial, residential, urban and transportation infrastructure, according to its website. It is investing and managing six industrial parks in its home province with a total area of about 13,000 hectares (32,100 acres), its website shows.

Warburg Pincus is planning more investments in Asian logistics companies as it seeks alternative ways to grow following a failed bid for Global Logistic Properties Ltd., people with knowledge of the matter said in September. The private equity firm was among bidders that pursued the Singapore warehouse owner, which was eventually sold for S$16 billion to a Chinese investor group backed by GLP’s management.

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