Actis successfully exits first real estate investment in Vietnam
- Milestone achievement for Actis as it exits its first real estate investment in Vietnam
- Vietnam is a key beneficiary from the strengthening trend of diversification of supply chains beyond China, including manufacturing
- Actis and An Phat Holdings to continue strong partnership in future projects
London, 18 December 2023: Actis, a leading global investor in sustainable infrastructure, has completed an exit from An Phat 1 Industrial Park (An Phat 1 IP), a 180-hectare sustainable industrial park in Hai Duong, Vietnam. Actis has sold its 49% stake in the industrial park to its operating partner, An Phat Holdings (APH).
An Phat 1 IP, located in Vietnam’s northern key economic zone, is a best-in-class industrial park with sustainability at its core. It is also Actis’ first investment in Vietnam, which has become one of the most attractive destinations for companies looking to diversify their supply chain and meet demand for manufacturing facilities outside of China.
An Phat 1 IP is part of Actis’ programmatic investment in the industrial property sector in Vietnam. Actis continues to invest in assets and locations that are well located to serve the demand coming from supply chain diversification. Actis works with a select group of high-quality local operating partners with strong project execution capability. An Phat Holdings, Actis’ partner in An Phat 1 IP, is one of the largest manufacturing groups in Vietnam. APH has a strong development track record, and comprehensive business ecosystem to support the development. Construction at An Phat 1 IP completed ahead of time, without any compromises on cost or quality, benefitting from APH’s strong on-the-ground capability.
APH and Actis selected Hai Duong as the location for the industrial park owing to its excellent regional connectivity and abundant supply of skilled workforce. In addition, Hai Duong recorded fast economic growth over the last five years given its ability to attract significant foreign direct investment (FDI), placing An Phat 1 IP in an excellent position to further attract manufacturing and create jobs.
Since the original investment in 2021, Actis and APH have worked together to make An Phat 1 IP a sustainability leader. Actis’ sustainability team assisted APH in identifying, evaluating, and implementing a range of sustainability initiatives, such as drawing on the local workforce during the construction and operation stages, procuring materials from local suppliers, delivering 17% more green area than required, reducing light pollution, minimising impacts to wildlife, and creating a good environment for the surrounding community. Through these initiatives and alignment on sustainability values, Actis and APH have achieved significant construction and operating cost savings, thereby enhancing the project’s financial performance.
The development of the international standard and sustainable industrial parks, such as An Phat 1 IP, will significantly enhance the competitiveness of Vietnam as an attractive destination for multinational corporations to locate their manufacturing facilities and will generate significant tax revenue for country. Already, this industrial park has attracted two of Apple’s global suppliers, which are expected to bring around 25,000 jobs to the local community.
Given its strategic location, and good quality support infrastructure, An Phat 1 IP attracted customer interest much faster than originally envisaged, the result being that Actis outperformed in both returns and exit time frame, bearing out Actis’s investment thesis.
Brian Chinappi, Partner and Head of Real Estate, commented: “This exit marks a milestone for Actis as it is our first exit in the real estate sector in Vietnam. Vietnam is a strategic market for us as it offers great opportunities for cost-effective manufacturing and supply-chain diversification. Our investment in An Phat 1 industrial park is consistent with our strategy to invest in new economy real estate, which sits right at the convergence of the four key global themes and three secular demand trends we identified. Our investments focus on the four global themes: digitalisation, supply-chain transformation, health and wellness; and climate transition. We also see three secular trends that accentuate the four themes: demographic shifts, deficient supply; and demand for yield. We have formed an excellent partnership with An Phat Holdings, which has strong operational capability and a comprehensive business ecosystem to support An Phat 1 IP. We worked closely with APH on a fully aligned and transparent basis to deliver a strong outcome and create a sustainability leader in An Phat 1 IP. We look forward to continuing the partnership with APH in future projects.”
Duong Pham, Chairman of An Phat Holdings, commented: “The partnership with Actis has resulted in greater success than anticipated in the An Phat 1 project. This collaboration has helped to enhance the reputation of An Phat Holdings in the industrial park real estate industry and has also improved the company’s management capabilities in this segment. We are actively seeking out opportunities to collaborate with Actis and other foreign partners to undertake larger industrial park real estate projects in the near future.”
ENDS