Singapore-headquartered ACA Investments is in the process of aggregating $70 million in fundraising for a slew of Vietnam-focused real estate funds, an executive of the firm told DEALSTREETASIA.
The latest fund is expected to close next month
Japanese-listed property developers including Samty Corporation contributed 50 per cent of the fundraising, said ACA Investments Partner Hiroyuki Ono. The remaining has been funded by mostly Japanese high net worth individuals and institutional investors.
Ono said the money has been raised in multiple vehicles. With the fresh $70 million being raised, ACA Investments’ total capital infused in Vietnam will surpass $100 million.
In an earlier interaction with DEALSTREETASIA last year, Ono said the Vietnam fund was expected to be launched with a focus on retail and logistics, and could save up to 15 per cent for public equity investments.
The change in the fund strategy (to focus on real estate) is primarily because of increased investor interest in the real estate industry, Ono said. Further, ACA Investments’ partnership with Daiwa Securities Group, gives it access to the retail industry through the regional fund sponsored by Daiwa.
For the uninitiated, Daiwa Securities Group acquired a 34 per cent stake in ACA Investments last October.
“Vietnam has become an exciting destination for investment capital. However, strategic investors take a careful view and to try to mitigate risks. With this fund, we can provide them with access to the market, especially after we have proven our success with Son Kim Land,” said Ono.
Sealing investments on a case-to case basis, ACA Investments recently partnered with Hong Kong-based EXS Capital to provide a $100 million funding to Vietnamese property developer Son Kim Land, a Ho Chi Minh City-based developer of residential, office and hospitality projects.
In addition, ACA Investments has also backed a host of Vietnamese companies including Viet Thanh Technology, Cat Dong Trading and Services and Bibomart.
Leveraging its exposure in Vietnam as well as experience in the real estate sector, ACA Investments has started deploying capital from the Vietnam fund, having worked on companies with a pipeline of residential and industrial projects.
Ono previously said that the fund targets ticket sizes of $15-30 million for investments in the country.
“Investor sentiment for Vietnam is also improved, thanks to easing property regulations and more products available in the market to invest, so opportunities are expanding,” he added.
When it comes to exits, IPO is the more preferable route for real estate and trade sale for investors. For the industrial segment, Ono, however, bets on investment trusts. REITS hold good IPO prospects while ensuring sustainable development of each entity.
Benefiting from the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), Vietnam has become a hotbed for global manufacturers. The country is also witnessing significant action in e-commerce and its burgeoning online commerce industry is projected to reach $10 billion by 2020. These factors together are creating new opportunities for industrial real estate.
“As investors hunt for higher yields around the region, industrial investments in Vietnam look attractive, particularly with the likelihood of significant rental growth in the coming years. Savills is working with a number of investors who are seeking to build large industrial portfolios in Vietnam and we expect the volume of transactions to increase steadily through 2019 and beyond,” commented Neil MacGregor, managing director of Savills Vietnam.
Overall, the property sector in Vietnam has attracted big corporations from Japan over the past few years. Conglomerates such as Mitsubishi, Maeda, Kajima, Sumitomo and Creed Group have flocked into the market with each investment deal made of several hundred million dollars.
Japan’s Global Link Cooperative director Yoshinori Nakata has reportedly said that Vietnam is the most attractive real estate market in Southeast Asia.