CapitaLand debuts $300m private equity fund to boost commercial real estate expansion in Vietnam
CapitaLand has created its first commercial fund in Vietnam — CapitaLand Vietnam Commercial Fund I.
The first in a series of investment opportunities, CVCFI has closed at $300 million. Investing in a class A commercial real estate in Vietnam, CVCFI will have a life span of eight years. CapitaLand will hold a 40 percent stake in CVCFI, while the remaining interests will be held by major institutional investors.
“Scaling up in the real estate sector requires strong financial capacity and flexibility. By proactively working with reputable capital partners to build scale, we can be nimble and react fast to seize growth opportunities,” said Lim Ming Yan, president and CEO of CapitaLand. “We see increasing investor interest in Southeast Asia, in particular Vietnam. They want to invest in the country through CapitaLand given our deep local platform and execution capabilities.”
CapitaLand concludes the growth trajectory of Vietnam and foresees that this trend will continue for at least the next 10 years. Besides the growing demand for residential properties with urbanization, CapitaLand also sees strong potential upside in the commercial real estate sector given the mismatch between demand and supply of quality office space.
CapitaLand Vietnam Commercial Fund I brings the firm a step closer to its goal of raising funds with total assets under management of up to S$10 billion ($7.3 billion) by 2020.
The fund launch is after the firm’s largest private equity partnership, the $1.5 billion Raffles City China Investment Partners III, which invests in prime integrated developments in gateway cities in China.
And the firm in January made its first foray into Vietnam commercial real estate through its acquisition and development of an international class A office tower in the Central Business District of Ho Chi Minh City, which will feature a direct connection to an upcoming metro station. The development will be completed in 2020.
Vietnam is the third-largest market for CapitaLand in Southeast Asia, after Singapore and Malaysia. CapitaLand has nine residential developments, 22 serviced residences with more than 4,700 units and one international class A office development across six cities in Vietnam.
