It’s been a busy week for Southeast Asia’s biggest real estate developer, as CapitaLand today announced its VND 1.38 billion ($58.98 million) acquisition of a site in the eastern suburbs of Vietnam’s Ho Chi Minh City.
The acquisition of the 60,000 square metre (645,834 square foot) site in Binh Trung Dong Ward of HCMC’s District Two, gives CapitaLand the opportunity to build 100 landed homes in an area that Vietnamese authorities have been positioning as their version of Shanghai’s Pudong district.
The site acquisition, which paves the way for CapitaLand’s thirteenth residential development in one of Southeast Asia’s fastest growing economies, also provides the developer with the opportunity to reinvest some S$397.6 million ($290.6 million) in proceeds from its sale of a 70 percent stake in a Singapore shopping mall earlier this week, and comes just one day after it surprised the region’s real estate community with news of a new CEO.
Buying a Spot Close to Thu Thiem
“We are pleased to bag another highly coveted site in Vietnam, where our ninth residential development in the fast-growing District Two of Ho Chi Minh City will be built,” CapitaLand’s president and outgoing group CEO Lim Ming Yan said in a statement.
In explaining its investment, CapitaLand highlighted the transport links and amenities available near the site, which is situated east of the city’s Thu Thiem area, an emerging financial district just across the Saigon River from HCMC’s traditional urban core in District One.
“Given the site’s location and connectivity, coupled with CapitaLand’s building expertise and experience, we are confident that the landed development will appeal to homebuyers and investors seeking international quality, well-designed homes with good potential for capital appreciation,” Chen Lian Pang, CEO of CapitaLand Vietnam noted. Chen added that D2eight, the company’s first landed residential development in Vietnam, which also is located in District Two, “…was sold out within a day of its launch on 8 April 2018.”
The new site is next to Ho Chi Minh City’s Ring Road 2 and six kilometres from the Phu My Bridge, which spans the Saigon River and has helped drive the city government’s efforts to create a new commercial centre in Thu Thiem.
Selling in Singapore, Buying in China and Vietnam
“This is CapitaLand’s third acquisition in the month of August, as we continue our momentum in replenishing our land bank,” CapitaLand’s Lim noted in the statement. The deal could be one of the industry veteran’s last at the company’s helm, after CapitaLand announced yesterday that current group chief investment officer Lee Chee Koon would be replacing Lim in the group’s top executive role on 15 September.
On August 14th CapitaLand announced that it had agreed to purchase a pair of residential sites in Guangzhou’s Zengcheng district for RMB 2.05 billion ($297 million), and on 16 August the developer teamed up with sometimes-rival City Developments Limited to win a government tender for a 3.7 hectare mixed-use site in northeastern Singapore for S$777.78 million. Lim explained the series of transactions as part of how the developer “actively replenishes its land bank and strengthens foothold in high-growth developed and emerging markets.”
Vietnam Now CapitaLand’s Third Biggest Market in SE Asia
This latest acquisition will add to CapitaLand’s existing S$1.1 billion portfolio in Vietnam, which now ranks as the company’s third-largest market in Southeast Asia, after Singapore and Malaysia.
Before purchasing this landed home site, the Singaporean developer’s existing holdings in the country included two integrated developments, 12 residential developments totalling close to c 8,000 homes across, two shopping centres, and more than 4,800 serviced apartment units in 21 serviced residences across seven cities.
In March of this year CapitaLand announced a joint venture to build a mixed-use development on a 0.9-hectare site in Hanoi’s Tay Ho District, and in November last year the company paid the equivalent of $177 million to purchase a site for a 24-storey, 870-unit residential development in Ho Chi Minh City.