Logistics powerhouse GLP has introduced its first commingled fund in Vietnam a year after the firm first setting foot in the country, PERE can reveal exclusively.
GLP Vietnam Development Partners I has been launched with an investment capacity of $1.1 billion. The vehicle has received commitments from a group of international institutional investors. The limited partners include Dutch pension fund manager APG Asset Management and Toronto-headquartered insurer Manulife, both of which have invested in GLP for the first time.
With a leveraged target return in the mid-teens, the fund has been seeded with six development sites totaling an investment size of circa $300 million. Going forward, the fund will focus on developing modern and environmentally friendly logistics facilities in Greater Hanoi and Greater Ho Chi Minh City. PERE can reveal that the seed assets were purchased by the joint venture between GLP and SEA Logistic Partners using balance sheet capital.
In 2020, SEA Logistic Partners and GLP launched a joint venture to invest in and develop modern logistics real estate in Vietnam. Co-founded by Chih Cheung, Jenkin Chiang and former president of GLP China Kent Yang, SLP is a Vietnamese logistics development and operation platform backed by GLP.
Yang told PERE that he has seen a lot of opportunities in Vietnam as the country’s logistics business has benefited from strained US-China relations, as well as a growing demographic and increased consumption. “With the shift of the supply chain [to Vietnam from China] and shortage of modern logistics facilities, this creates tremendous opportunity and demand for SLP’s logistics infrastructure,” he explained.
It is understood that GLP decided to launch the commingled fund earlier than originally scheduled because of the ample interest the vehicle received from its existing investors.
Graeme Torre, managing director and APG’s head of Asia-Pacific real estate, believed that the country’s growing middle class and e-commerce market has made it a very attractive opportunity for APG. The investment “complements very well” with the investor’s existing regional logistics exposure while offering very strong risk-adjusted returns, according to a release seen exclusively by PERE.
Gerald Posthuma, chief investment officer of Asia general accounts investment and Kenny Lam, senior managing director, head of Asia real estate investments for Manulife, also said in the release that Vietnam is one of the firm’s key growth markets in Asia and is bolstered by “strong economic fundamentals.”
GLP is not alone in tapping into the logistics market in Vietnam. Hong Kong-headquartered logistics specialist ESR teamed up with Warburg Pincus-backed industrial platform BW Industrial Development to develop and own an industrial park near Ho Chi Minh City last year. Singapore’s Mapletree Logistics Trust also bought three logistics properties in the country as part of its $1 billion acquisition of 17 warehouses in Asia Pacific.