DANANG, Vietnam: Property developer CapitaLand said it views the Vietnam market as being the second most important market for itself after Singapore.
President and CEO Liew Mun Leong has likened the growth potential of Vietnam to Chinese cities like Shanghai and Guangzhou. To help the company expand in Vietnam, CapitaLand has formed a strategic partnership with another Vietnamese developer.
Urbanisation in Vietnam is growing fast, fuelled by strong economic growth. The United Nations has estimated that by 2015, one third of Vietnam's population will live in cities, creating a wealth of opportunities for property developers like CapitaLand.
Mr Liew said: "I see Vietnam as the second best growth area, the second best growth engine for us in Southeast Asia, next to Singapore. The dynamics of this market are the same as what I saw in Shanghai, Beijing and Guangzhou ten years ago. It has identical growth factors and identical prospects of urbanisation, economic growth and a demand for housing and real estate."
To better ride the development boom, CapitaLand has formed an alliance with Tham Nam Long Investment Company, a major player in the property scene here.
Together, they plan to develop residential properties, and commercial and residential mixed developments.
CapitaLand has also moved to set up a US$300 million fund to invest in real estate projects in Vietnam.
It has signed a memorandum of understanding with Citi Private Bank to act as the placement agent for the fund. CapitaLand said it intends to take a 30 percent sponsor stake in it.
The developer said late last year that it wants to double the number of residential homes under development to 6,000 over three years.
It is also planning to move into the integrated leisure, entertainment and conventions (ILEC) sector.
CapitaLand already has a presence in Ho Chi Minh City and Hanoi. Now, it wants to go into other cities.
The resort city of Danang is the third busiest port in Vietnam, but it has yet to see foreign investment on the scale enjoyed by Hanoi and Ho Chi Minh City.
Besides real estate, government officials here want to develop Vietnam's potential as a holiday destination, and they are banking on places like Danang to pull in the tourist dollar. - CNA/so
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