Frasers Property and Gelex Group: A Strategic Venture in Vietnam’s Industrial Landscape

In a significant move poised to reshape the industrial landscape in Vietnam, Singapore-listed Frasers Property has announced a joint venture with Hanoi-based Gelex Group. This partnership is set to revolutionize warehouse and manufacturing development across northern Vietnam, backed by a substantial VND 6 trillion (approximately $250 million) investment. This strategic initiative marks Frasers’ second industrial joint venture in Southeast Asia’s fastest-growing economy, highlighting the increasing demand for industrial space in the region.

The Scope of the Joint Venture

Frasers Property’s latest collaboration aims to develop over 500,000 square meters (5.4 million square feet) of industrial space, including standard factories and warehouses. The partnership will utilize an expansive 80-hectare (198 acres) site, although the specific location remains undisclosed.

This venture is particularly significant as it stipulates Frasers Property holding a 51 percent stake, while Gelex retains a 49 percent ownership. The focus will be on key locations that boast robust existing infrastructure, particularly in the provinces of Bac Ninh and Hung Yen, both of which lie east of Hanoi, as well as the coastal province of Quang Ninh.

Vision for Industrial Development

Hua Tiong Lim, CEO of Frasers Property Vietnam, expressed enthusiasm for collaborating with Gelex Group, a partner known for its alignment in vision and goals. “We are confident that our quality industrial spaces developed to international specifications and catered to tenants’ business needs will add value to Vietnam’s northern key economic zones,” he commented. The projects will be branded under the Premium Estates label, which Frasers first introduced in Australia two years ago, featuring smart and sustainable industrial designs to foster healthy and productive workplaces.

The development plans will also adhere to international green building certifications, reflecting a commitment to sustainable construction practices. The phased development strategy will ensure timely execution, with some projects set to break ground this year.

Meeting Market Demands

One of the driving forces behind this joint venture is the significant international interest in industrial spaces in Vietnam, particularly for facilities meeting international standards. Lim pointed out, “While doing our part for the low-carbon transition, we aim to attract higher-value investments by enhancing standards in industrial estates and offering one-stop designs for build-to-suit solutions.”

Gelex Group, listed on the Ho Chi Minh Stock Exchange, brings a wealth of experience across various sectors, including manufacturing electrical equipment and infrastructure investments. This partnership follows their previous successful collaborations in Hanoi, where the two companies developed a 306-key Melia Hotel and an adjoining office building.

Expanding the Partnership

This recent joint venture is part of a broader strategy by Frasers Property to solidify its presence in the industrial sector. Just a month prior, the company expanded its operations by opening a new office in Hanoi, complementing its existing location in Ho Chi Minh City. Additionally, Frasers completed the first phase of the Binh Duong Industrial Park, marking its initial foray into the industrial sector in southern Vietnam.

According to its 2022 annual report, Frasers had completed 40,360 square meters of ready-built facilities in Binh Duong by the end of last year, with plans to expand this figure significantly. The total development value of this project is projected to reach around $180 million upon completion, further emphasizing the company’s commitment to nurturing the industrial segment.

Industry Trends and Future Outlook

As part of a broader trend, Frasers’ expansion intersects with other high-profile investments in Vietnam, signaling the country’s potential as a manufacturing and shipping hub. International firms, including Hong Kong-listed logistics giant ESR and US developer Hines, are also making significant strides in the region, highlighting the growing competitive landscape.

For instance, ESR recently announced a $207.8 million investment to acquire a nearly 11 percent stake in BW Industrial, strengthening its foothold in Vietnam’s burgeoning real estate market. Similarly, Hines has opened its first office in the country, expressing keen interest in industrial opportunities.

In light of these developments, Frasers Property’s partnership with Gelex Group is set to become instrumental in addressing the increasing demand for industrial facilities in Vietnam, positioning both companies favorably in this dynamic market. As they work towards establishing exemplary industrial parks, this collaboration promises to meet the rising expectations of clients while contributing to Vietnam’s economic growth.