Singapore property firms deepening presence in Vietnam

Singapore

AMID a wealth boom and an economic rebound, Vietnam has been attracting capital from property companies in Singapore.

The Vietnamese posh apartment segment in particular has surged in popularity and caught the eye of developers as the nation's affluent class grows.

In 2022, the economy is expected to accelerate its recovery from the pandemic, after having recorded a 2.6 per cent increase in gross domestic product (GDP) in 2021. DBS Group Research forecasts Vietnam's GDP growth to reach 8 per cent this year, boosted by an accommodative monetary policy.

Here are some of Singapore's real estate industry players that have made further inroads into the Vietnam market in recent months.

CapitaLand

The development arm of CapitaLand Group on Dec 14 said it would acquire a prime site for its first large-scale residential project in Vietnam, with the transaction expected to be completed by H1 2022.

CapitaLand Development (CLD) estimated that the projected total gross development value could come up to 18,330 billion dong (S$1.12 billion).

Located in Binh Duong New City, about 30 km from Ho Chi Minh City, the site will yield more than 3,700 freehold residential units across a mix of low, mid and high-rise developments.

In early December, CLD also said it sold all 88 units of Define, its luxury residential development in Ho Chi Minh City, in just 2 hours. The units went for an average selling price of about 125 million dong per square metre, translating to some 11.6 million dong (S$689) per square foot.

Over in Hanoi, CLD will launch the 173-unit Heritage West Lake luxury residence for sale in H1 2022.

Separately, CLD is selling a Grade A office building in Hanoi for S$751 million as part of its capital recycling efforts. In a Jan 20 press statement, CLD said it will redeploy the divestment proceeds into higher-yielding assets and as seed capital for future funds to be developed together with CapitaLand Investment in Vietnam.

Ronald Tay, chief executive of CLD (Vietnam), noted that the company "firmly believes in Vietnam's excellent growth prospects" and continues to seek real estate investment opportunities in offices, residential and urban developments, as well as in new economy assets such as logistics facilities, data centres and business parks.

Keppel

A consortium comprising Keppel Land, Keppel Vietnam Fund (KVF) and a co-investor of KVF plans to acquire a 49 per cent stake in 3 residential land plots in Hanoi for about 2,715 billion dong.

Local developer Phu Long Real Estate Joint Stock Company and its related party will hold the remaining 51 per cent interest, Keppel Corp said in a filing on Jan 22.

Of the 3 sites, which span 14.2 hectares in total, 2 are zoned for landed housing development while 1 is for a high-rise condominium.

The Keppel consortium and Phu Long intend to jointly develop some 1,260 homes, consisting of around 1,020 condominium apartments and 240 landed homes.

Joseph Low, Keppel Land president (Vietnam), noted the "strong demand for thoughtfully designed and high-quality homes amongst discerning buyers in Hanoi".

The project will expand the company's footprint in Vietnam, where Keppel Land's portfolio includes offices, housing, malls, integrated townships and serviced apartments.

Mapletree Logistics Trust

The Asia-focused, Singapore-listed real estate investment trust (Reit) will buy 3 modern logistics facilities in Vietnam from its sponsor Mapletree Investments for about S$132.7 million.

Mapletree Logistics Trust's manager on Nov 23 said Vietnam is a beneficiary of supply-chain diversification, amid the country's competitive costs and an attractive investment environment.

"With rising consumption, an expanding middle-income urban population and strong e-commerce adoption rate, demand for quality logistics space is expected to remain robust, while supply of Grade A logistics space remains limited," the Reit manager noted in a filing.

The 3 assets are located in the provinces of Bac Ninh and Binh Duong, which serve Hanoi and Ho Chi Minh City respectively. Both locations are warehouse clusters popular with third-party service providers for domestic distribution and with e-commerce tenants for last-mile delivery.

The Ascott Limited

CapitaLand Investment's wholly-owned lodging business unit, The Ascott, on Oct 12 said it will manage 1,905 units across 3 serviced residences within local real estate developer Sun Group's Tay Ho View Complex in Hanoi.

The 3 serviced residences are expected to open in phases from Q1 2023. The partnership with Sun Group brings Ascott's portfolio in the country to about 9,200 lodging units in over 30 properties across 12 cities.

In June 2021, Ascott acquired the 364-unit Somerset Metropolitan West Hanoi through its private fund, the Ascott Serviced Residence Global Fund. Situated in Hanoi's new central business district, the property is slated to open in 2024.

Also, Ascott in July 2021 opened a new 154-apartment serviced residence, Somerset Feliz Ho Chi Minh City. This is the fifth Somerset property managed by Ascott in the city, and is part of the Feliz en Vista residential project developed by CapitaLand and Thein Duc.

READ MORE:

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• Golden hotels and luxe apartments: The rise of Vietnam's ultra-rich
• Singapore is top investor in Vietnam for 2nd year running
• Acquisitions by S-Reits exceed S$12 billion in 2021