An Phat 1 Industrial Park: A New Era in Vietnam’s Industrial Landscape
An Phat 1 Industrial Park is on the road from Hanoi to Haiphong. (Image: An Phat Complex)
Introduction to An Phat 1 Industrial Park
Nestled strategically between Hanoi and Haiphong in Hai Duong province, the An Phat 1 Industrial Park is a significant milestone in Vietnam’s industrial development. Spanning 180 hectares (approximately 445 acres), this ambitious project has marked a new chapter for both local and international investors, showcasing Vietnam’s potential as a competitive manufacturing hub in Southeast Asia.
Actis’s Strategic Exit
In December 2023, Actis, a London-based fund manager, made headlines when it sold its remaining 49% stake in An Phat 1 to its Vietnamese partner, An Phat Holdings (APH). This transaction not only concluded Actis’s first venture into real estate in Vietnam but also highlighted the successful collaboration between international investors and local industry leaders. The exact financial details of the sale remain undisclosed, but Actis noted that the endeavor exceeded expectations in terms of returns and exit timeline.
The Investment Journey
Actis’s journey began in June 2021, when the fund committed $20 million to this project, attracted by Vietnam’s rapidly evolving market. “Vietnam is a strategic market for us as it offers great opportunities for cost-effective manufacturing and supply-chain diversification,” Brian Chinappi, Actis’s partner and head of real estate, remarked. The partnership with An Phat Holdings has proven fruitful, thanks to the latter’s robust operational capabilities and business ecosystem that align with Actis’s vision for An Phat 1.
Sustainability and Technological Focus
Designed as a sustainable, high-tech industrial park, An Phat 1 is anticipated to host between 50 and 70 manufacturing plants and warehouses once fully operational. According to reports, two major suppliers for Apple have already established their presence within the complex. This development not only underscores the park’s strategic importance but also highlights its potential to attract leading global manufacturers.
Economic Impact and Future Growth
The industrial park was completed ahead of schedule, generating significant cost savings during both construction and operations. As noted by Troy Griffiths, deputy managing director at Savills Vietnam, the industrial real estate sector in Hai Duong province has thrived due to its connectivity to Haiphong and the recent opening of new freeways, driving substantial appreciation in land values.
Occupancy rates for industrial parks in northern Vietnam reached 83% in the first half of 2023, with average monthly rents for ready-built factories hovering around $4.8 per square meter. This robust performance illustrates the growing demand for industrial spaces in the region, positioning Vietnam as a key player in the global manufacturing landscape.
Future Collaborations and Projects
Despite exiting An Phat 1, Actis plans to continue its fruitful partnership with APH for future projects. The fund manager has demonstrated its commitment to the region by also forming a separate partnership in 2021 aimed at developing ready-built factories and warehouses, with an investment ceiling of $250 million. Duong Pham, chairman of An Phat Holdings, emphasized the collaboration’s role in enhancing the company’s reputation in industrial real estate and its quest for larger projects in the future.
Shifting Supply Chains and Investment Trends
The exit from An Phat 1 does not mark an end to Actis’s investment strategies in Vietnam. The fund is keen to tap into the ongoing reshuffling of global supply chains, which has made Vietnam an attractive destination for manufacturers. Brian Chinappi noted that Actis’s investments will continue to center around four key global themes: digitalization, supply-chain transformation, health and wellness, and climate transition. These trends present lucrative opportunities fueled by demographic changes and evolving investment landscapes.
Actis’s Broader Vision for Asia
With over $12 billion in assets under management, Actis is intensifying its focus on Asia, with a particular emphasis on emerging markets. The fund has announced plans to invest up to $2.5 billion in India over the next four years, targeting sectors such as energy transition and logistics. Additionally, there are intentions to pour $700 million into life sciences real estate in India, showcasing the fund’s expansive vision for growth.
Conclusion: A Bright Future Ahead for An Phat 1 and Beyond
The An Phat 1 Industrial Park stands as a testament to the synergy between local expertise and international investment, paving the way for a dynamic industrial future in Vietnam. With strategic partnerships and a robust framework for sustainable development, the project is well-positioned to thrive in a competitive global marketplace, reinforcing Vietnam’s status as a manufacturing powerhouse. As Actis continues to explore new opportunities in the region, the collaboration with An Phat Holdings looks poised to yield fruitful results for years to come.