Singapore-based developer CapitaLand has set up a $130 million real estate fund in Vietnam, which is aimed at strengthening the company’s foothold in its now third largest market in Southeast Asia. The fund will be used for an integrated development at a prime site in downtown Hanoi.
The fund was jointly launched with the Singapore investment company MEA Commercial Holdings, and is CapitaLand’s second fund in Vietnam. Their first fund closed at $300 million USD last year.
The new fund is expected to run for 8 ~ 10 years and will focus on Grade A commercial properties in Vietnam. The fund will start with a $217 million USD investment into a 25-story integrated project at a site that has been acquired in Hanoi’s Tay Ho district
According to Lim Ming Yan, CapitaLand President & Group CEO of CapitaLand, “With this latest project, we expand our presence in the capital city of Hanoi and reaffirm CapitaLand’s commitment as a long-term partner in Vietnam’s urbanization journey.”
Vietnam is the third largest market for CapitaLand in Southeast Asia, after Singapore and Malaysia. The company had $715 million worth of gross assets under management in Vietnam at the end of 2017.
The company had record sales of $347.6 million in 2017, a 63% increase from 2016 and sold a total of 1,409 residential units during this time. A majority of the sales were in Ho Chi Minh City and the company expects to see increase in sales in other cities as it expands it Vietnam portfolio.
Chen Lian Pang, CEO of CapitaLand Vietnam said in media interviews that the second Vietnam commercial fund will bring CapitaLand closer to its target of leveraging private equity funds for its asset management to $7.5 billion by 2020.