Asia's biggest warehouse operator GLP announced to form a joint venture with SEA Logistic Partners to invest in modern logistic real estate in Vietnam, logistics firm GLP said in a statement.
The venture will initially focus on two largest markets, Hanoi and Ho Chi Minh City and surrounding provinces, and marks GLP’s entrance into Southeast Asia.
In coordination with the announcement of the joint venture, SLP announced it secured approximately 335,000 square meters of land in Hanoi and Ho Chi Minh City for the development of three modern logistics assets which will have 210,000 square meters of net leasable area upon completion.
Two of the developments, SLP Park Bac Giang and SLP Park Bac Ninh, are strategically located in North Vietnam.
SLP Park Bac Giang, with a net leasable area of 80,000 square meters, has received 50 percent pre-leased commitment from Jusda, the former central logistics unit of Foxconn group and the most professional supply chain logistics technology service platform in the manufacturing industry, as well as an existing GLP customer.
The third property, SLP Park Long Hau, is strategically located in Long Hau, Long An Province and is part of the Greater Ho Chi Minh area, which serves as a bridge between Ho Chi Minh City and the 12 provinces in the Mekong Delta.
The investment value has not been revealed, but Reuters cited an executive at the Chinese-owned firm as saying the $1.5 billion investment in Vietnam over three years via the new venture to tap rising demand for logistics facilities in the South-East Asian country.
GLP has 50% of the company.
The partnership enables SLP to leverage GLP’s fund management, development and operational expertise and resources, as well as GLP’s extensive global customer network.
Even before the novel coronavirus pandemic, Vietnam and other low-cost Asian countries had seen increased business from international manufacturers looking to diversify supply chains away from China, and also to escape higher tariffs.
"So Vietnam becomes a very good option to set up an alternate supply chain solution," Yang, a former president of GLP China, told Reuters in an interview.
“Within Southeast Asia, Vietnam is one of the most attractive markets given its population dynamics, growing economy and middle class which support domestic consumption. When GLP enters a new market, growth and scalability are two key factors we consider. We see similarities between Vietnam and our logistics businesses in China, India and Japan and know we can leverage our expertise and knowledge from our experiences in those markets to create a strong and sustainable business in Vietnam,” Ming Mei, co-founder and CEO said.
GLP forms strategic partnerships that create opportunities and synergies to expand its core logistic real estate business globally.
Over the last several years, GLP has strengthened its global footprint to 64 million square meters by acquiring assets, portfolios, businesses and forming partnerships and now operates in 16 countries across Brazil, China, Europe, India, Japan, the U.S and Vietnam.
GLP, which has $89 billion of assets under management in real estate and private equity funds, sees big potential to expand business in Vietnam, given the early growth stage of its fragmented logistics real estate industry.
