CapitaLand signs JV agreement for fifth residential project in Vietnam

The approximately 9,000 square metre site is located in and established populous area with amenties such as a supermarket, vocational school and planned sports and recreational facilities. CapitaLand and NovaLand plan to develop the site, about 10 kilometres from the city's Central Business District, into a residential development with around 500 apartments.

The project has an estimated total cost of $40 million, in which CapitaLand will contribute 70 per cent of the stake.

Chen Lian Pang, CEO of CapitaLand (Vietnam) Holdings said: "We are confident of the outlook in Vietnam, underspinned by its strong economic growth, stable government and pro-growth regulatory environment. The country's real estate market is supported by rapid urbanisation and a huge population of 86 million people of which more than half of them are under the age of 30."

"As urbanisation gathers pace and the middle class grows in tandem with the economy, demand for housing in Ho Chi Minh City and Hanoi is set to rise," he added.

"CapitaLand will continue to explore opportunities to extend its presence in other real estate segments in Vietnam through strategic partnerships. We target to grow our current total asset base of S$400 million in Vietnam to approximately S$2 billion over the next three to five years," Pang said.

Currently, CapitaLand's presence in Vietnam is in Ho Chi Minh City, Hanoi, Haiphong and Danang in the residential and serviced residence sectors. The group has five quality residential projects with a development pipeline of over 4,500 residential apartments in Ho Chi Minh City and Hanoi. Its wholly-owned serviced residence business unit, The Ascott Limited, has over 1,300 apartment units in eight properties across the four major cities of Vietnam, making it the largest international serviced residence owner-operator in Vietnam.

NovaLand's flagship project is Sunrise City, a premium 500,000 square metre mega-mixed development situated in Ho Chi Minh City's District 7 with an investment capital exceeding $500 million. The company is slated for listing on the stock exchange in 2011.