ESR chooses a strategic stake as the lead investor in BW Industrial's financing round

The contribution is part of BW's bigger ambition of generating up to $450 million. The number of shares bought up by the corporation was not disclosed.

With approximately $2 billion in assets under management (AUM), Warburg Pincus-backed BW claims to be Vietnam's largest and fastest-growing pure-play logistics and industrial developer, including the country's largest bank and the largest e-commerce and last-mile delivery logistics cluster in Ho Chi Minh City.

Since ESR and BW formed a development joint venture for the 240,000-square-metre My Phuoc 4 project in 2021, which represented ESR's first foray into Vietnam, both parties have cooperated on a variety of projects.

At BW, ESR will nominate a board member. Fion Ng, ESR's Southeast Asia head of investment and development, is joining BW as chief operating officer.

Jeffrey Shen and Stuart Gibson, ESR co-founders and co-CEOs, said, ESR's strategic investment in BW marks a key milestone for our company in Southeast Asia. 

With little contemporary space available, Vietnam is experiencing high demand for logistical and industrial space.

In reality, ESR liquidated a record $1.4 billion of its balance-sheet investments (mainly in China) in the first half of 2022, returning more than $1 billion in net cash to the firm.

ESR said it chose Vietnam because it was one of the most robust countries during the COVID-19 pandemic and one of the few in the world to have positive GDP growth in both 2020 and 2021.

"We are delighted to mark a new milestone for BW, and we are excited to build on our existing strategic relationship with ESR," stated Lance Li, CEO of BW.

ESR, like BW, was co-founded by Warburg Pincus, a large US private equity firm. BW CEO Lance Li formerly worked at ESR China as vice president of mergers & acquisitions and international business.

BW will compete for a piece of the Vietnamese real estate pie with other global businesses such as Sydney-based Logos Property and Singaporean logistics behemoth GLP.

Logos Property is currently constructing an 80,000-square-metre warehousing complex worth around $70 million. In addition, Singapore logistics conglomerate GLP has purchased three properties in Vietnam with plans to build 210,000 square meters of logistical facilities with local partner SEA Logistic Partners.

Source: DealStreetAsia