Optimistic of Warehouse Business Outlook, VAST Acquires Warehouse to Continue Expansion
By : Nata Kesuma | Monday, December 18 2023 - 12:30 IWST
PT Vastland Indonesia Tbk (IDX: VAST)
INDUSTRY.co.id - Jakarta, - Warehouse property developer PT Vastland Indonesia Tbk (IDX: VAST), acquisition of land and buildings in the form of warehouses, each with an area of 39,450 m2 and around 18,045 m2 in Tangerang, Banten on December 12, 2023.
The land and building for warehouses, worth Rp 97.5 billion, already operated and rented by customers mainly from e-commerce and fulfillment center sector, and will increase Company’s revenue. VAST’s is performing this expansion to anticipate warehousing demand and increase presence in a new location, given the increase they experienced during 2023.
The initiative to accommodate the increase in demand was also carried out because the prospects of industrial areas and warehouses are predicted to be positive for the long term. During the third quarter/2023 the transportation and warehousing sector recorded the highest growth, reaching 14.74% year-on-year (yoy), with a contribution of 5.98% to Indonesian economic growth.
Vastland has been in the field of warehousing for more than 10 years. The Company has and manages warehouses in Lampung, Pekanbaru, Palembang, Bengkulu, Jambi, Klaten. With this acquisition, VAST officially expanded warehouse expansion in the Tangerang area, which is now in operation and occupied by a tenant of good quality.
"The prospect of warehousing is still bright, the gears of the economic are spinning faster, as such the need for warehousing continues to be high," explained the Director of Finance Vast Stanley V Gunawan, "Our latest expansion is expected to increase the Company's turnover by around 30%."
As national industry growth, there will be a growing need for warehousing due to increased activity and distribution of national economy. Although after Covid more people have traveled out to buy needs, but the habit of transacting through e-commerce has been formed, maintaining high demand for logistics/expedition services to meet various orders.
Although the majority of VAST customers have been distributors and FMCG, Vastland has started diversifying customers by adding Exposure Fulfillment Center and Last Mile Logistics services to adapt to market needs and reduce risk of dependency to specific customer base.
VAST expects this diversification to draw in additional revenue for the Company. Customer diversification can also maximize the potential occupancy of the Company's warehouse while minimizing the risk of dependence on certain customer sectors so that the Company can grow stable and consistently.
Vastland is committed to keep providing warehouses that meet their clients’ requirements in strategic areas. By 3Q23 Vast has improved a stable financial balance with DER of 0.17 (vs 0.40 at 9M22), the Company also experienced an increase in cash and cash equivalent to 10.1 billion rupiah at 9M23. All are indicators that the Company is still financially healthy to support future expansion.