SINGAPORE - CapitaLand, through wholly-owned subsidiary CapitaLand (Vietnam) Holdings, has entered into a conditional agreement to acquire a prime commercial site in the Central Business District (CBD) of Ho Chi Minh City to develop its first international Grade A office tower in Vietnam.
CapitaLand will hold a 100 per cent stake in the 0.6-hectare site with a gross floor area of 106,000 square metres. Located in the heart of Ho Chi Minh City's District 1, the site will be developed into a 240m office tower with retail units at the ground and basement levels.
The development will be directly connected to a planned metro station which will link the CBD to the districts of Binh Thanh, 2 and 9.
Construction is expected to commence in the first quarter of this year and will complete in 2020, which is about the same time the metro line is expected to begin operation.
Said Mr Lim Ming Yan, CapitaLand president & group CEO said the office development serves to diversify CapitaLand's portfolio and strengthen our foothold in Vietnam.
"It is also in line with our plan to establish a US$500 million investment fund to focus on commercial properties in Vietnam. CapitaLand has a 22-year track record in Vietnam which has delivered to-date, 22 serviced residences, nine residential developments and now, a prime commercial property.
"Given its strong growth outlook and positive market sentiments, we are excited to be a long-term player in Vietnam's growth story and will continue to look out for opportunities to grow our footprint."
Mr Chen Lian Pang, CEO of CapitaLand Vietnam, said, "As one of the tallest buildings in Ho Chi Minh City when completed, this commercial development will be the only project in the CBD with unfettered views of the beautiful Saigon River and a direct connection to the future metro line. CapitaLand sees strong potential upside in the office market, particularly in Ho Chi Minh City, given the mismatch between demand and supply of Grade A office buildings.
"We are confident that our development's prime address will attract top multinationals, locally incorporated foreign banks and financial institutions. Tenants can look forward to state-of-the-art office facilities as well as exciting retail offerings, including some of the city's best restaurants and cafes, lifestyle and entertainment outlets."
Vietnam is CapitaLand's third largest market in Southeast Asia, after Singapore and Malaysia. Last November, CapitaLand announced plans to set up a US$500 million fund to invest in commercial properties in Vietnam, its second one after a US$200 million fund launched in 2010 which has been fully invested in the development of three residential projects in Ho Chi Minh City and Hanoi.