Developer CapitaLand has acquired a prime site for its first integrated development in the Vietnamese capital Hanoi.

It has also set up its second commercial fund in the country - CapitaLand Vietnam Commercial Value-Added Fund.

The land in Tay Ho district will be developed into a 25-storey mixed-use development worth around US$217 million (S$288 million).

It will comprise a 380-unit residence, including Small Office Home Office (SoHo) apartments, around 230,000 sq ft of office space and 208,000 sq ft for retail, CapitaLand said.

CapitaLand secured the land when a unit acquired 16.97 million shares or 99.49 per cent of the charter capital of Hien Duc Tay Ho Joint Stock Company for about 685 billion Vietnamese dong (S$39.9 million).

Hien Duc owns about 0.9ha in the Tay Ho district.

CapitaLand president and chief executive Lim Ming Yan said yesterday: "This mixed-use development allows us to strategically diversify and optimise our Vietnam portfolio with both good trading returns and a strong recurring income stream.

"With this latest project, we expand our presence in Hanoi and reaffirm CapitaLand's commitment as a long-term partner in Vietnam's urbanisation journey."

The new fund CapitaLand announced yesterday will have a lifespan of eight years and will focus on grade-A commercial properties in Vietnam.

It has closed at US$130 million, with CapitaLand and MEA Commercial Holdings each holding a 50 per cent stake.

Mr Lim said the firm will develop the Hanoi project through this new fund.

"Together with our US$300 million CapitaLand Vietnam Commercial Fund, which was set up last year, we are now closer to our five-year target of leveraging private equity funds to grow our assets under management by $10 billion before 2020."

CapitaLand shares closed two cents down at $3.61 yesterday.