HO CHI MINH CITY -- A Warburg Pincus-backed industrial developer in Vietnam is targeting an initial public offering in 2027, according to sources familiar with the matter, as it steps up preparations to capitalize on demand from manufacturers shifting production from China and elsewhere.

BW Industrial, a joint venture by the private equity firm and Becamex, has weighed a listing in Vietnam since at least 2024. The sources did not tell Nikkei Asia how much stock it is looking to sell.

The company, one of Vietnam's biggest logistics and industrial developers, rents out warehouses and ready-built factories that it says have become popular as manufacturers seek a lower-tariff hub for their China Plus One strategies.

China's Asian Infrastructure Investment Bank said it is considering a $50 million pre-IPO investment in BW, with a decision set for October. BW announced a $120 million partnership with an unnamed "global institutional investor" in January, focused on three projects around Vietnam serving electronics, auto and other clients.

Last month BW began recruiting a senior manager to lead IPO reporting audits and help prepare tax and prospectus forms. The hiring plan drive and potential AIIB investment suggest preparations for a listing are gathering pace.

Now that index provider FTSE Russell has upgraded Vietnam BW may have a bigger pool of investors to tap if it floats in Ho Chi Minh City.

"BW would be a nice addition to the industrial real estate universe, as it is different from residential real estate," which is overrepresented in the stock market, Dynam Capital chair Craig Martin told Nikkei Asia. It is "a more direct play on the Made-in-Vietnam story." But demand for BW shares would depend also on the alternatives available at the time. Insurers and other funds may be interested, while retail investors likely want "exciting growth" stocks, Martin said.

"If domestic investors want yield, they can currently get 7-8% on bank deposits without taking equity risk," he said. "So the timing of an IPO would be important." The joint venture has benefited from the electronics and e-commerce boom in Vietnam. Besides producers of tech gadgets, it leases space to Shopee, 7-Eleven and others stocking inventory.

"We do not have any specific update," BW told Nikkei Asia when contacted about an IPO. "We remain focused on executing our long-term growth strategy and serving our customers across Vietnam." Clients from Greater China rent 6,200 square meters of property on average, compared with the 5,200-sq.-meter average among tenants overall, the company said last year.

"What's most exciting about Vietnam's manufacturing potential today is the convergence of two forces: the acceleration of supply chain diversification and the increasing shift away from transhipment strategies," BW CEO Lance Li said in 2025. "As tariffs reshape global trade routes, more Chinese-linked supply chains are moving directly to Vietnam over the next decade." Becamex is Vietnam's largest state-owned industrial and infrastructure developer. BW touts its prebuilt factories as a quicker way for manufacturers to enter the fast-growing Southeast Asian country. It leased out 4 million sq. meters to 470 customers as of December, 90% of them foreign.

The company also works with ESR, one of Asia's biggest logistics managers, where Li used to be a vice president. ESR took a 10.4% stake in BW, according to its 2023 financial report, and has collaborated with the Vietnamese business on several industrial builds.