Singapore-based CapitaLand has set up a new commercial fund in Vietnam with MEA Commercial Holdings, raising US$130m (€106.6m).
CapitaLand Vietnam Commercial Value-Added Fund (CVCVF), is CapitaLand’s second commercial fund in Vietnam, now its third-largest market in Southeast Asia, after Singapore and Malaysia.
CapitaLand and Singapore investment company MEA will each hold a 50% stake in the fund which is expected to run for eight years.
CapitaLand said the fund’s first integrated development will be built on a newly-acquired prime site in Vietnam’s capital city, Hanoi. Completed value of the project will be about US$217m.
The fund will focus on Grade A commercial properties in Vietnam.
Lim Ming Yan, CapitaLand’s president and group CEO, said: “This mixed-use development allows us to strategically diversify and optimise our Vietnam portfolio with both good trading returns and a strong recurring income stream.
“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 urbanisation journey.”
Lim said CapitaLand was now closer to its five-year target of leveraging private equity funds to grow assets under management (AUM) by SGD$10bn (€6.1bn) before 2020.
The group’s first Vietnam fund, the US$300m CapitaLand Vietnam Commercial Fund, was set up last year.
Chen Lian Pang, CEO of CapitaLand Vietnam, said: “CapitaLand sold 1,409 residential units, mostly in Vietnam’s southern city of Ho Chi Minh City, to hit record sales of SGD459.6m in 2017.”
The figure surpassed sales of S$282.1m in 2016 by 63%.
At December 31, 2017, CapitaLand had SGD948m worth of gross assets under management in Vietnam.