In a statement announcing the venture, LOGOS Managing Director and co-CEO Trent Iliffe said, “Being able to establish this new venture in the midst of the covid-19 pandemic is testament to Vietnam’s exciting growth story, which is driven by the global trade wars, decentralization of supply chains and a natural evolution of this market, and LOGOS’ proven track record across South East Asia.”
Ready for takeoff
With this new foray, LOGOS enters a Vietnamese logistics real estate demand environment that was flowering even before the disruptions of covid-19. A report in January from Vietnam Investment Review had occupancy rates in major urban industrial parks (IPs) in Vietnam’s north and south averaging over 92 and 80 percent, respectively, as of late 2019, as manufacturing companies pivoted away from China due to U.S trade war tensions and rising Chinese production costs.
Last week, the International Finance Corporation, a member of the World Bank Group, announced that it will provide a financing package of $70 million to Indo Trans Logistics Corporation of Vietnam—its first-ever Vietnamese logistics investment—with the express purpose of supporting the sector’s development in that country.
In announcing the investment, IFC noted that despite record-high foreign direct investment in Vietnam’s manufacturing and processing industries, its logistics sector has remained very fragmented, with more than 95% of service providers being small and medium-sized enterprises.
LOGOS’s entry into the Vietnamese market marks the fourth successful closing in 2020 for LOGOS, which has raised over $1 billion in logistics real estate investments across the Asia-Pacific region this year, despite volatile global market conditions.
LOGOS expects an initial portfolio of $350 million by gross asset value. In the coming months, the venture will be proceeding with strategic acquisitions from an identified pipeline of development sites, along with speculative and build-to-suit logistics facilities ready for occupation over the next 12 to 18 months.
LOGOS’ Asia Pacific portfolio currently holds 100 logistics estates across nine countries with around $9.5 billion in AUM. LOGOS counts some of the world’s largest fund managers as its shareholders, including ARA Asset Management, a leading Asia Pacific real assets fund manager with S$110 billion in assets under management, took a majority stake in the company in March 2020. Other investors include Canadian real estate giant Ivanhoé Cambridge, which has $64 billion under management.