Warburg Pincus consortium adds $100m as follow-on investment in Vincom Retail

A consortium led by an affiliate of global private equity group Warburg Pincus has added a follow-on investment worth approximately $100 million in Vincom Retail, a subsidiary of Vietnam’s largest real estate operator Vingroup, the US-based fund announced on Monday.

Vincom Retail is Vietnam’s largest owner and operator of shopping malls.

The follow-on investment has brought to the total funding placed in the retailer by the consortium to $300 million, making it “one of the largest investments by a private equity firm ever in Vietnam,” said Warburg Pincus, which currently manages $35 billion in assets.

Its first investment of $200 million was made in May 2013, which was meant to help build out Vincom Retail. To date, the shopping mall operator has acquired 20 malls in operation or under development.

“Together with a robust pipeline in prime locations nationwide, the company has the only true national mall network,” the PE firm said.

Vincom Retail’s existing prime assets include Vincom Dong Khoi and Vincom Thu Duc in Ho Chi Minh City, Vincom Ha Long, Vincom Ngo Quyen in the central province Da Nang, and four others in Hanoi.

The properties are home to more than 700 domestic and international brands, such as the Robins Department Store, Marks & Spencer, CJ CGV, Mango, DKNY, French Connection (FCUK), BCBG Maxazria, Karen Millen, GAP, Lacoste, Nike, Adidas, Emigo, VinMart, VinPro and Vinpearl Land.

According to Vingroup’s chief executive Duong Thi Mai Hoa, the retail arm of the group has more than tripled the size of its portfolio since it first entered the partnership with Warburg Pincus two years ago. “The follow-on investment by the Warburg Pincus consortium is a vote of confidence from our investors in our strong performance to date and our long-term vision for both Vincom Retail and Vietnam,” she said.

Hoa added that the second investment will help Vincom Retail accelerate its expansion of a broader retail platform, which includes shopping facilities, electronics retail, fashion and e-commerce.

Jeffrey Perlman, managing director of Warburg Pincus, believes Vincom Retail is poised for a strong growth over the next five years, bolstered by the economic prospects on the back of continued urbanisation and emerging middle class consumption.

In addition to property and retail, Vingroup is also developing into other verticals of hospitality and entertainment, education, healthcare and agriculture.

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