CapitaLand restructures business focus and unlocks shareholder value

April 12, 2022 | 14:27
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CapitaLand Group has implemented a strategic restructuring of its operation and management to increase the business results and unlock shareholders' values. Ronald Tay, CEO of CapitaLand Development (CLD) Vietnam talked with VIR’s Bich Ngoc about the restructuring and its benefits.

What is CapitaLand’s plan to preserve its ecosystem amid the restructuring?

CapitaLand restructures business focus and unlocks shareholder value
Ronald Tay, CEO of CLD Vietnam

The restructuring is a continuation of the CapitaLand 3.0 transformation that started when we merged with Ascendas-Singbridge in 2019 and aims to further accelerate our stated transformation and business objectives.

In line with this restructuring, CLD’s investment management platforms, as well as its lodging business, are consolidated into CapitaLand Investment Limited (CLI), and listed on the Singapore Exchange; while the real estate development business of CLD has been privatised.

Tapping on the synergies of our ONE CapitaLand ecosystem and working closely with CLI, we have successfully created value for our capital partner through our real estate development and asset management capabilities.

While CLI and CLD are separate entities with distinct mandates, we will continue leveraging each other’s strengths within the ecosystem.

How has the development of CLD Vietnam been so far?

Last year we successfully launched DEFINE in Ho Chi Minh City and acquired a prime freehold site for our first large-scale residential project in Binh Duong.

Earlier this year, we also signed an MoU with the People’s Committee of Bac Giang province to explore the development of our first industrial park, logistics park, and township development in Vietnam with an investment value of more than $1 billion. We also look forward to the launch of Heritage West Lake in Hanoi and other projects in Ho Chi Minh City.

We have a number of other investments in the pipeline that we are looking forward to announcing soon as we start to execute our investment plan in Vietnam.

Moving forward, what will be CapitaLand’s development strategy in Vietnam?

Vietnam is one of CLD’s core markets where we have built an extensive presence. We target to more than double our capital allocation by approximately $2 billion into new investments in Vietnam over the next five years.

What will you do to achieve that ambitious plan?

Vietnam is one of the fastest-growing countries in Southeast Asia, and we remain bullish on long-term prospects for this market. The World Bank has forecasted Vietnam’s GDP growth at 6.5-7 per cent per annum from 2022 onwards.

CLD’s significant asset base, coupled with development expertise and extensive local knowledge, puts us in a strong position to contribute to the next stage of Vietnam’s industrialisation and urbanisation. We will continue to build on this and look to take on more industrial, logistics, and township developments in strategic locations in Vietnam.

We expect that our strategy to expand into logistics parks and industrial parks will culminate in a portfolio of prime investment grade logistics assets and a foothold in the development of infrastructure assets. In addition, we’re continually evaluating new asset classes such as data centres and business parks in Vietnam.

What will be your development plan for industrial property in Vietnam?

We are confident that we are able to draw on our global experience to implement and develop a successful and sustainable project comprising industrial park, logistics park, and township development in Bac Giang.

The opportunity to invest in the Bac Giang province is in line with our strategy to accelerate our growth and increase the scope of our business in Vietnam. CLD seeks to contribute to the next stage of Vietnam’s industrialisation and urbanisation as well as meet the increasing need for high-quality logistics and supply chains.

We are also exploring expanding into up-and-coming provinces surrounding Hanoi and Ho Chi Minh City such as Bac Ninh, Hung Yen, Haiphong, Binh Duong, Dong Nai, and Long An.

CLD is the development arm of CapitaLand Group, with a portfolio worth approximately $16.5 billion as of December. CLD’s well-established real estate capabilities span various asset classes, including integrated developments, retail, offices, lodging, residential, business parks, industrial, logistics, and data centres.

CLD Vietnam oversees and grows its investment and development business in Vietnam, where it has built an extensive presence over 28 years. CLD Vietnam's portfolio comprises one retail mall, two integrated developments, and over 12,000 quality homes across 16 residential developments.

By Bich Ngoc

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