Keppel raises US$400m in first closing for Vietnam-focused real estate fund

KEPPEL Corp's asset management arm Keppel Capital and property arm Keppel Land have launched a Vietnam-focused real estate fund, which raised US$400 million in its first closing.

This includes co-investment commitment from an unnamed global institutional investor, Keppel Capital and Keppel Land said on Friday in a press statement.

The fund - named the Keppel Vietnam Fund - has a target size of US$600 million. It seeks to invest alongside Keppel Land in real estate projects, including residential developments, commercial properties as well as mixed-use projects and townships in Vietnam, with a focus on Ho Chi Minh City and Hanoi.

Keppel Capital's private fund management arm Alpha Investment Partners will be the fund manager, while Keppel Land will be the development and property manager of the fund's properties.

The fund will potentially have assets under management of about US$1 billion when fully leveraged and invested, Keppel Capital and Keppel Land said.

Keppel Capital chief executive Christina Tan said the new fund will allow Keppel Capital to expand into a new geography and strengthen its product offerings to global investors seeking quality real assets.

Keppel Land chief executive Tan Swee Yiow said capital raised from the fund will support Keppel Land's efforts to scale up its presence in Vietnam and adopt an asset-light strategy with lower capital requirements.

"Our strong track record in building and operating developments across various property segments, as well as extensive local network, will enable the fund to access proprietary deal flows, and allow Keppel to enhance the returns from its property business by tapping investor capital," he said.

Keppel Land has been operating in Vietnam for close to three decades, Mr Tan said. Its portfolio includes Grade A offices, residential properties, malls, integrated townships and serviced apartments.

The US$400 million closing of the fund is not expected to have any material impact on Keppel Corp's earnings per share and net tangible asset per share for the financial year ending Dec 31, 2020.

Shares of Keppel Corp closed flat at S$5.15 on Thursday.