CapitaLand buys prime site for its first integrated project in Hanoi; sets up US$130m fund

CAPITALAND has acquired a prime site for its first integrated development in Hanoi, Vietnam, and has set up its second commercial fund in the country - CapitaLand Vietnam Commercial Value-Added Fund.

The land in Tay Ho district will be developed into a 25-storey mixed-use development worth roughly US$217 million. It will comprise a 380-unit residence, including Small Office Home Office (SoHo) apartments, around 230,000 square feet of office space and over 208,000 sq ft of retail space, CapitaLand said.

The fund - with a life span of eight years, has closed at US$130 million. CapitaLand and MEA Commercial Holdings will each hold a 50 per cent stake. The fund will focus on grade A commerical properties in Vietnam.

CapitaLand has acquired, through its wholly owned subsidiary CVH Nereus, 16.97 million shares or 99.49 per cent of the charter capital of Hien Duc Tay Ho Joint Stock Company for about 685 billion Vietnamese dong (S$39.8 million), the real estate player said on Thursday morning.

Incorporated in Vietnam, Hien Duc owns about 0.9 hectareof land in the Tay Ho District in Hanoi. The remaining 86,986 ordinary shares representing 0.51 per cent of the charter capital of Hien Duc, are held by parties unrelated to CapitaLand.

Said Lim Ming Yan, CapitaLand president and group chief executive officer: "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."

Mr Lim added: "We will undertake this investment through our second commercial fund in Vietnam. Together with our US$300 million CapitaLand Vietnam Commercial Fund which was set up last year, we are now closer to our five-year target of leveraging private equity funds to grow our assets under management by S$10 billion before 2020."

CapitaLand shares closed S$0.02 or 0.6 per cent higher at S$3.63 on Wednesday.