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HO CHI MINH CITY: Southeast Asia's largest property developer CapitaLand is exploring the idea of creating a development fund worth US$300 million to invest in properties in Vietnam.
This was revealed by its President & CEO, Liew Mun Leong, while on a visit to Vietnam.
He also disclosed that the property developer is planning to double the number of residential units that it is building in southern Vietnam to about 6,000 units in three years.
Ho Chi Minh City in southern Vietnam is a bustling area by any standards. With an increasing affluent population of more than eight million, demand for homes has been rising.
CapitaLand estimates that the current demand is about 60,000 homes, while supply is only about a third of that, so it believes there will be plenty of potential for residential units in the city.
"Now we have 2,800 (units). We can easily double that – doing 5,000, 6,000 or 7,000 in the next few years," said Mr Liew.
CapitaLand is aiming to be among the top five foreign developers in Vietnam in three years' time.
It is looking into the possibility of setting up a development fund for Vietnam, similar to the ones in China and India, although the idea is still in the early stages.
"I must say we are studying this subject... We are probably pioneering it in Ho Chi Minh City. It's a new subject but if we talk about size, in China most of our funds are around US$300-US$500 million. So I think the ballpark (figure for the fund in Vietnam) will be at the lower end of that - about US$300 million," said Mr Liew.
CapitaLand said the development fund could be used to invest in a range of Vietnamese properties, including residential, retail and office. For now, the focus is on residential developments, especially in up-and-coming districts.
District 7 in the southern suburbs of Ho Chi Minh City may be a relatively barren piece of land now, but many international property developers have been flocking to this area for a slice of the lucrative property market.
Besides developing residential property, CapitaLand also currently operates two serviced apartments with over 1,000 units in Vietnam.
The property developer wants to build a few buildings that are the equivalent of Singapore's Capital Tower, which has a nett lettable area of some 69,000 sq metres, in Vietnam.
It is also exploring options for Vietnam's integrated leisure, entertainment and convention business. It will build on its experience of working with partners such as US-based MGM and Kerzner in their bids for the integrated resorts in Singapore.
If suitable, it may even replicate in Vietnam the business models planned for the Marina Bay and Sentosa resorts.
On a separate note, Mr Liew said the sub-prime woes in the US may not have a huge impact on the Singapore property market.
He said: "The way I see it, with the sub-prime problem, is that confidence is a bit affected. But we had a good run for three quarters (of the year). The sub-prime problem only really hit us in October.
"Obviously from October till now, after three quarters of run-up, we had already sold so much. We don't have anything to sell now. So for the next quarter, it seems volumes have slowed down... nobody would deny that, but prices are still holding up."
- CNA/so
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