Asia’s Rising Star
January 2017
Thirty years ago, Vietnam was regarded as one of the poorest countries in the world. Since then, it has propelled itself to become one of the fastest growing economies in the world between now and 2050.
CapitaLand has journeyed with Vietnam for more than two-thirds of that time, entering the fledging nation in 1994 — just a few years after the local government instituted doi moi , an open-door economic policy.
“[At the time], CapitaLand identified the potential of Vietnam with its young, educated and hardworking population, rapidly growing economy and growing middle class,” said Mr Chen Lian Pang, CEO of CapitaLand Vietnam, in a June 2016 media interview.
As one of the first international developers to enter the market, CapitaLand made waves with its Hanoi Tower and Sofitel Plaza in Hanoi. It then went on to launch a string of successful residential developments from its maiden Ho Chi Minh City project, The Vista (2007) to the affordable ‘value home’ PARCSpring (2012) and the popular Vista Verde (2014).
Twenty-two years later, the company has embarked on its ninth residential project — a luxury boutique development named D1MENSION in the sought after District 1 of Ho Chi Minh City.
The US$51.9 million, 0.5-hectare site will be transformed into CapitaLand’s first luxury boutique development and its first residential project in Vietnam to offer concierge and property management services by its wholly owned serviced residence arm, The Ascott Limited, under the Somerset brand. Estimates place the project value at US$106 million (approximately S$143 million).
“This is CapitaLand’s third acquisition in Vietnam since June 2015, a testament of our confidence in Vietnam’s positive economic outlook. In 2015, CapitaLand was among the top-performing foreign developers in Vietnam with 1,321 residential units sold at a value of S$226.5 million. We are confident that our residential developments in Hanoi and Ho Chi Minh City will continue to attract homebuyers and investors seeking quality, well-designed and well-located homes with good potential for appreciation in value,” shared Mr Chen.
Riding on this momentum, CapitaLand sold 656 units or 40% of its total inventory in Vietnam for a total value of S$114 million in the first nine months of 2016.
The CapitaLand lifestyle
Connected to downtown Ho Chi Minh City via the Vo Van Kiet highway, it is a five-minute drive from the Central Business District and about a 10-minute drive to the vibrant retail scene at Tran Hung Dao Street and Nguyen Van Cu Street. It also enjoys connectivity to the established expatriate enclave of District 7 with its world-class shopping malls and international schools.
The 102-unit luxurious residential tower will offer a variety of two-, three- and four-bedroom apartments as well as penthouse units, with prices starting from US$299,000. It was launched to warm response in Singapore in October 2016, moving over 60% of units launched.
“We are excited to launch D1MENSION in Singapore, building on the momentum of our success with The Vista, Vista Verde and Seasons Avenue,” said Mr Chen.
“While those projects cater more to the mass market segment, D1MENSION is our first luxury boutique development in Vietnam and our first foray into the coveted District 1 of Ho Chi Minh City. Buyers will get to enjoy guaranteed rental income for two years, and can be assured of sustainable value in the mid to long term.”
Meanwhile, the 200-unit serviced residence, Somerset D1MENSION Ho Chi Minh City, will offer expatriates and business travellers a range of two- and three-bedroom apartments, penthouse units and family-oriented amenities including a swimming pool, fitness centre and children’s playground.
The Ascott edge
CapitaLand’s wholly owned serviced residence arm The Ascott Limited continues to augment its position as the largest international serviced residence owner-operator in Vietnam, its largest market in Southeast Asia. The brand now has a portfolio of more than 4,500 units in 22 properties across seven localities, with five properties in Ho Chi Minh City alone.
Mr Lee Chee Koon, CEO of The Ascott Limited, shared: “This year, we brought Ascott’s largest property globally to Vietnam – the 550-unit Citadines Blue Cove Danang is slated to open in 2018. We are set to open our first serviced residences under our premier Ascott The Residence brand in Ho Chi Minh City and our first Citadines Apart’hotel property in Nha Trang in 2017, to complement our established Somerset brand in Vietnam. We remain confident in the potential for serviced residences in the country, and will continue to seek opportunities to expand in cities where we have presence and other high growth cities.”
Ascott also recently announced new management contracts in Hanoi and Halong City. With Citadines Marina Halong slated to open in 2020 and PentStudio in Hanoi expected to receive guests from 2018, Ascott is marching steadily towards its goal of achieving 7,000 units in one of its best performing countries by 2020.
Committed to the Vietnam growth story
“Beyond residential projects, we are also on the lookout for investment opportunities in offices, serviced residences and integrated developments,” revealed Mr Chen. “Besides a residential tower, our new site will also have a serviced residence component that will generate recurring, stable income as an investment property. We are encouraged by the high 94% occupancy rate and positive returns at Somerset Vista Ho Chi Minh City – another serviced residence operated by Ascott, and connected to retail outlets, office facilities and a residential component within an integrated development known as The Vista. We will continue to identify opportunities to achieve a balanced portfolio with both trading and investment assets.”
To fuel its growth ambitions for the country, CapitaLand plans to establish a US$500 million fund by 2017 to invest in commercial property, mainly in Ho Chi Minh City and Hanoi. Given the mismatch between demand and supply, the Group sees strong demand in the Grade A office sector, particularly in Ho Chi Minh City.
As at end June 2016, CapitaLand’s total asset size in Vietnam is S$748 million, making it the Group’s third largest market in Southeast Asia, after Singapore and Malaysia. With all these plans to expand its footprint in one of Asia’s fastest growing economy, CapitaLand is certainly committed to help shape the Vietnam growth story.