CapitaLand Vietnam, a unit of Singapore-based realty major CapitaLand Limited, has entered into a joint venture (JV) with Saigon Commercial & Tourism Corporation, a subsidiary company of Thanh Nien Corporation (Thanh Nien), to develop a prime site in District 2 at Ho Chi Minh City, for an estimated project value of $55 million.
Thanh Nien is an established Vietnamese enterprise with several property developments in its pipeline, offering potential for further collaboration.
This is CapitaLand’s sixth residential project in Ho Chi Minh City. CapitalLand Vietnam had earlier in June 2015 formed a JV with another local firm Thien Duc Trading-Construction Company to develop $143.6-million, 1000-unit upscale project in District 2.
The latest project is located in the expatriate community of Thao Dien ward and is 2 km from the new Metro line, as well as a 10-minute drive to the future Thu Thiem Central Business District (CBD) in District 2 and a 15-minute drive to the existing CBD in District 1.
The residential project is intended to be a one-hectare residential development with approximately 350 units and is close to amenities like shopping malls, cinemas and established international schools, like the British International School, Australian International School and European International School.
CapitaLand will hold an 80 per cent stake, with Thanh Nien holding the balance of 20 per cent in the JV. Chen Lian Pang, CEO of CapitaLand Vietnam, said, “CapitaLand is one of the top- performing foreign developers in Vietnam in the first nine months of 2015 when it sold 873 units, achieving sales of about S$138.5 million. As at end June 2015, CapitaLand’s total asset size in Vietnam is S$618 million.”
Chen added, “This CapitaLand-Thanh Nien partnership will increase CapitaLand’s residential portfolio in Vietnam to about 7,850 homes across Ho Chi Minh City and Hanoi. It also presents long-term business relationship potential as we explore more development opportunities with Thanh Nien for several other projects in its pipeline.”
Since July 2015, a slew of legislative changes have enabled foreign investment and ownership of Vietnamese real estate. Before, foreigners could only lease a single Vietnamese property in Vietnam. Now, foreigners can buy and own more than one 50-year leasehold property in Vietnam for their own occupation, lease or sale. This has led to Singapore developers being able to sell their units onshore in Vietnam and also market them in Singapore.
Commenting on this, Lim Ming Yan, president & group CEO of CapitaLand, stated: “As a committed and long-term developer in Vietnam, CapitaLand welcomes the opening of its property market to foreign investment and ownership in July. This bodes well for the healthy development of Vietnam’s real estate market.”
Lim added, “Coupled with the country’s strong economic growth forecast of 6.5% and continued population growth, Vietnam is now CapitaLand’s third largest market in Southeast Asia and one of our fastest growing in the region. Backed by our 20-year track record in Vietnam as a reputable developer and international serviced residence owner- operator, we will continue to expand our presence in Vietnam via good investment and management opportunities.”
CapitaLand will be launching two of its Vietnam properties for sale in Singapore – Vista Verde and The Vista – in early November. According to a release, both developments are within a 15-minute drive from the existing CBD in District 1 of Ho Chi Minh City.
Commenting on the offering, Chen said, “We are offering limited units of The Vista for what will be the first rental guarantee scheme in Ho Chi Minh City. These units come with guaranteed rental yield of 6% per annum for two years and will be managed by The Ascott Limited. Vista Verde, which was just launched last September, has sold over 80% of its launched units.”