ESR buys $208 mln stake in Vietnam’s BW Industrial amid Southeast Asia expansions

Hong Kong-based real estate giant ESR has acquired a “strategic” equity stake in its Vietnam partner BW Industrial as part of a funding round that could raise up to $450 million for the major industrial developer.

“ESR’s strategic investment in BW marks a significant milestone for our business in Southeast Asia,” ESR co-founders and co-CEOs Jeffrey Shen and Stuart Gibson said in a release.

“Underpinned by strong growth fundamentals including rapid urbanization, a fast-rising consumer class, and the exponential growth of e-commerce, Vietnam is witnessing robust demand for logistics and industrial space with limited available modern space.”

Lance Li, CEO of BW, said in the release: “With the transformative shift of the manufacturing base to Vietnam as well as the rise of domestic consumption especially via e-commerce, BW is well positioned to deliver new economic infrastructure to support the long-term growth of Vietnam.”

He added: “We will continue to explore further collaborations, either greenfield developments, acquisitions, or joint ventures to accelerate our growth trajectory going forward.”

In another announcement to the Hong Kong stock exchange, where it goes with the code of 1821, ESR said that it was purchasing over 168 million newly issued BW shares, or 10.89% of the issued charter capital in BW, for a total of less than $207.8 million. ESR may elect to subscribe to additional shares following that acquisition that will give it no less than 15% shareholding in BW post-investment.

The statement did not provide details of how the new funding would be deployed, or how large of a role ESR played in the financing round.

Ho Chi Minh City-headquartered BW, a joint venture between American private equity giant Warburg Pincus and Vietnamese leading industrial developer Becamex, currently has several facilities under development in both Hanoi and HCMC, Vietnam’s largest economic hubs.

“We are excited to partner with ESR where we can leverage our collective resources, experience, and relationships to cement our market leading position,” said Li of BW.

Established in 2018, BW now has around $2 billion in gross assets under management and markets itself as one of the largest and fastest-growing logistics and industrial developers in Vietnam.

In May 2021, BW and Hong Kong-based ESR set up a joint venture to develop the My Phuoc 4 Industrial Park in Binh Duong province bordering HCMC. The 240,000-square-meter project is already leasing both logistics and light manufacturing facilities.

ESR also seconded Fion Ng, ESR’s head of investment and development for Southeast Asia, to take on the role of chief operating officer and head of north at BW.

BW, in partnership with ESR, converted 80,000 square meters of its warehouse at My Phuoc 4 into a major field treatment center serving COVID-19 cases in 2021.

Since announcing its inaugural environmental, social and governance (ESG) 2025 roadmap in 2020, ESR has made progress across its key pillars, and its investment in BW will extend its sustainability best practices to Vietnam.