CapitaLand debuts US$300m PE fund to boost Grade A commercial property expansion in Vietnam

CAPITALAND Limited has set up its first private equity fund in Vietnam that closed at US$300 million to boost its expansion into Grade A commercial real estate in Vietnam.

The commercial fund - CapitaLand Vietnam Commercial Fund I (CVCFI) - will have a life span of eight years with CapitaLand holding a 40 per cent stake while the remaining interests will be held by major institutional investors.

"CapitaLand is positive about the growth trajectory of Vietnam and foresees that this trend will continue for at least the next 10 years," said CapitaLand president and group chief executive Lim Ming Yan in a statement.

The real estate juggernaut already has a strong presence in key gateway cities such as Ho Chi Minh City and Hanoi and hopes to leverage its developer-owner-operator capabilities, fund management expertise and harness synergies across asset classes to deliver better risk adjusted returns for investors, Mr Lim added.

CVCFI brings CapitaLand a step closer to its goal of raising funds with total assets under management of up to S$10 billion by 2020.

"It comes on the back of our largest private equity partnership, the US$1.5 billion Raffles City China Investment Partners III, which invests in prime integrated developments in gateway cities in China," said Mr Lim.

The group hopes to continue to grow its returns on equity by generating fee income. In the first half of this year, it earned S$95.9 million in fees from non-listed real estate and Reit management activities, which made up 5 per cent of group revenue.

CapitaLand has nine residential developments, 22 serviced residences with over 4,700 units and one international Grade A office development across six cities in Vietnam.