BW, ESR start factory complex project in Hai Phong industrial park

The project features a modern, single-story light industrial facility. With a clear ceiling height of 7 meters and up to 2 tons per square meter of floor loading capacity, the project is designed to provide tenants with maximum operational efficiency.

The project, one of three development joint ventures between BW and ESR, will mark BW’s 10th project launched this year. It cements BW’s leading position in the market while expanding ESR’s APAC footprint in the high-growth Southeast Asia region.

A ceremony to start work on BW and ESR project in Hai Phong. Photo courtesy of BW

Nam Dinh Vu is a prime location for foreign direct investment (FDI) in industries such as automotive, electronics, renewables, electrical equipment, and machinery.

Vietnam registered new FDI projects worth over US$16.41 billion as of November this year, a year-on-year (YoY) rise of 42.4%, while total registered FDI increased nearly 15% YoY, with Hai Phong emerging as a key player in this landscape.

The city’s Dinh Vu-Cat Hai Economic Zone offers attractive tax incentives to manufacturers, including a 4-year exemption and a 9-year half-reduction of corporate income tax.

BW’s new project is also well-connected to other northern provinces and China through the Hanoi-Hai Phong Expressway, Ha Long-Hai Phong Expressway, and Hanoi-Hai Phong Expressway. This connectivity facilitates transportation of goods to and from the seaport, enhancing the project’s appeal to potential manufacturers.

The ready-built industrial facility situated in the Dinh Vu-Cat Hai Economic Zone, is well-positioned to serve as a manufacturing hub for exports. Photo courtesy of BW

Jeffrey Shen and Stuart Gibson, ESR Group co-founders and co-CEOs, said that the company’s expansion in Vietnam is in line with its focus on scaling up presence in Southeast Asia, one of the fastest-growing regions in the world.

“The commencement of construction for our project in Nam Dinh Vu marks an important milestone for our business in Vietnam, a market that has been a key beneficiary of the reallocation of manufacturing and supply chain activities to Southeast Asia and one that is poised for robust growth driven by favorable macro-economic factors and supported by a young working population,” they added.

According to Lance Li, CEO of BW, supply chain diversification has been a top priority for many companies this year. In fact, some of BW’s customers were given specific deadlines by which to set up alternative manufacturing locations by their end customers. As a result, the company has seen a 75% surge in leasing inquiries YoY, as many companies are planning to lease rather than build, given the strict time constraints.

“The demand for ready-built factories in Hai Phong is on the rise because of its geographic proximity to China with direct road connections to China’s South Electronics Supply Chain Cluster; it takes less than 1 day for trucks to deliver goods from Hai Phong to Shenzhen. Thus, as part of their China Plus One strategy, it is attractive for companies to locate in Nam Dinh Vu. In close collaboration with ESR, we are enthusiastic about leveraging ESR’s pan-APAC footprint and tenant relationships, BW’s vast experience on the ground, and proven track record in Vietnam to capitalize on the opportunities presented by this project,” Li said.

BW has seen a 75% increase in leasing enquiries YoY. Photo courtesy of BW

While the general real estate market in Vietnam has experienced a slowdown, the industrial and logistics real estate segment stands out as a beacon of opportunity, fueled by the continuous influx of FDI.

According to the Asian Development Bank, Vietnam’s GDP is set to rebound to 6% in the coming year, with an expected recovery in exports and domestic production.

In addition, the recent elevation of diplomatic ties to a comprehensive strategic partnership between Vietnam and the United States is expected to spur investment from U.S. companies in sectors such as semi-conductors and new energy.

In light of this promising outlook, Vietnam is expected to continue to benefit from increasing manufacturing interest over the long term.

BW is Vietnam’s leading logistics and industrial real estate platform, with over 8.5 million square meters of industrial land in prime locations under control across 48 projects in 11 key cities and provinces in Vietnam. BW has been focused on developing for-rent modern warehouses and light industrial facilities to capture the outsized growth opportunities of manufacturing, increasing domestic consumption, and the rapid growth of e-commerce.

As of 2023’s first quarter, BW has secured equity commitments of more than US$1 billion from its investors and partners and has formed strategic partnerships with leading global manufacturers, e-commerce, and logistics players to serve one of the fastest-growing markets in Asia. For more information about BW, visit here.

ESR is the largest real asset manager in Asia Pacific (APAC) and the third largest listed real estate investment manager globally. With approximately $150 billion in assets under management, it offers a diverse range of investment solutions and New Economy real estate development opportunities across key APAC markets. ESR is the largest sponsor and manager of real estate investment trusts in Asia, with total assets under management (AUM) worth approximately $45 billion. For more information on ESR, visit here.