How important is the Vietnamese market for the development strategy of CapitaLand?
|Chen Lian Pang |
Vietnam plays an important role in CapitaLand’s development strategy. It is the third-largest market for CapitaLand in Southeast Asia, after Singapore and Malaysia.
Vietnam is a key growth market for CapitaLand and we are seeing strong demand for vibrant, high-quality live-work-play spaces due to the rapid urbanisation and the evolving lifestyles of young and mobile Vietnamese people.
Harnessing our vast experience across different real estate types, this upcoming integrated development will offer best-in-class practices in homes, offices, and malls, which will attract young Vietnamese urbanites, multinational companies, and local startups.
What are CapitaLand’s biggest achievements in 24 years of operations in Vietnam?
I can say that CapitaLand is now the biggest apartment unit provider and operator in Vietnam with a total of 33 projects, offering a total of just under 14,000 serviced and for-sale apartment units.
In Ho Chi Minh City, we have The Vista, Vista Verde, PARCSpring, Krista, Kris Vue, Feliz en Vista, D1MENSION, D’Edge, D2Eight, and De La Sol. In Hanoi, we have been developing Mulberry Lane and Seasons Avenue.
In the latest development, we acquired majority shares in a company that owns a prime site for our first integrated development in Hanoi in March 2018. Located in Hanoi’s exclusive Tay Ho district with unblocked views of the scenic West Lake, the upcoming 25-storey integrated development will comprise a 380-unit residence including SoHo apartments, around 21,360 square metres of office space and over 19,320sq.m of retail space.
|CapitaLand boasts a number of high-profile residential developments in Vietnam’s major cities |
Have you gained good business result in 2017 and the first half of 2018?
2017 marked a record year of growth for CapitaLand in Vietnam, with the highest value in home sales achieved. In Ho Chi Minh City, d’Edge Thao Dien, a 273-unit residential development, achieved record sales, selling out in less than two months after its launch in July. This is a testament to customers’ confidence in the CapitaLand brand and underscores strong demand for our high-quality projects in Vietnam.
CapitaLand also launched D1MENSION in Ho Chi Minh City, located in District 1.This is the city’s first branded residence comprising a luxury residential tower and a serviced residence, both managed by our serviced residence unit, The Ascott Ltd., which will also offer concierge services to the residents.
Meanwhile, in Hanoi, the 1,300-unit Seasons Avenue, located at the heart of the Mo Lao New Urban Area, topped out on schedule in March 2017 and has sold more than 80 per cent of the units as of December 31, 2017.
In the first half year of 2018, we continued our residential sales to be a market leader not only in terms of size, but in terms of project quality. Currently, we are developing an exclusive landed development called “D2eight”, which features an exclusive community of 28 shophouses. In addition, we are also developing De La Sol in Ho Chi Minh City’s District 4.
CapitaLand CSR activities in Vietnam over the years
CapitaLand has a policy of reserving up to 0.5 per cent of its net operating profit annually to the CapitaLand Hope Foundation, its philanthropic arm, to promote the social growth and development of underprivileged children with respect to their education, healthcare, and shelter needs.
Vietnam is a key growth market for CapitaLand and the group remains committed to contributing to the country’s urbanisation journey. It recognises that the long-term success of CapitaLand’s business is closely intertwined with the health and prosperity of the communities in which it operates. The group seeks to improve not just the economic, but also the environmental and social well-being of the community, in line with its credo ‘Building People. Building Communities.’
In total, three CapitaLand Hope Schools in Vietnam provide quality education to about 650 students each year. Apart from building CapitaLand Hope Schools, various corporate social responsibility (CSR) initiatives including blood donation drives, first aid training, festive activities for street children, tree plantings, and cycling days have also been organised.
The business results have been good, along with higher appreciation from buyers and partners. What are the reasons for these good results?
For foreign developers like CapitaLand, we have more advantages. We have more product innovation in term of amenities and design. We are confident in our quality and we can keep our promise to deliver on time. So we have three perks: product innovation, timely delivery, and good quality. In addition, we also have experience. We are a professional real estate company with a great track record around the world. We have acquired knowledge building our products in different countries and we can apply this in Vietnam. Some outstanding projects in other countries include Raffles City and The Interlace, which won the World Building of the Year in 2015.
Apart from this, we have innovation, extensive design, development, and operational capabilities across different markets. We also have in-depth knowledge of local markets, sound financials and management, and a good track record and reputation.
Are there any challenges you face in Vietnam?
Yes, opportunities also come up with challenges. As a Singaporean developer, one of the challenges we face is acquiring new land banks with favourable parameters. However, with more than 24 years of experience in Vietnam, we have learned to overcome issues and challenges to steadily develop numerous projects in the country. Another challenge is the recruitment of local talent who have the capabilities and expertise to manage our projects and communicate effectively with the team. As part of our talent management programme, we identify staff with potential and equip them with the relevant training and resources to take on bigger roles in the organisation.
Being one of the most technologically advanced developers on the real estate market, how has CapitaLand transferred technology to the local real estate market?
At CapitaLand, we have been applying all professional procedures from Singapore to our operations in Vietnam. We are committed to minimising our environmental impact as a real estate developer. We believe that lowering the environmental footprint of our buildings through innovation creates value for our stakeholders.
We also incorporate environmental sustainability in the life cycle management, in all stages of a project, from feasibility, design, procurement, construction, and operation to re-development. In Vietnam, we remain committed to being a good corporate citizen and building a greener future for the Vietnamese people and many generations to come.
Apart from that, we also train our staff to work professionally, following Singaporean standards. CapitaLand Vietnam is continuing to contribute to the Vietnamese economy by hiring and nurturing a strong local team. When we started our operations in Vietnam in 2006, one-third of our staff were expatriates. Now, the percentage of expatriates is just 15 per cent. We promote young local talent to become heads of departments and train young project managers. We have a systematic training and development path for all our staff and are committed to developing our staff to have long-term careers within our company.
What are your major targets and development plans in Vietnam in the next few years?
We hope to expand our brand in Vietnam over the next five years. Currently, we have around 350 employees and hope to increase this number to 450-500 in the near future, as we scale up our operations in the residential segment and target to acquire more office and commercial buildings as well as serviced apartments. We may even build a Raffles City–a well-known brand name of mixed development–in Vietnam.
So far, CapitaLand Group has built nine Raffles City developments internationally, and hopefully we will see the next one in Vietnam. We are working with various sources with the target to acquire more land to bring us a step closer to achieving this aim.