The fund, which will have a life span of eight years, will be used to invest in Grade A commercial real estate in Vietnam.
CapitaLand will hold a 40% stake in CVCFI, while the remaining interest will be held by major institutional investors, the company announced on its website.
Lim Ming Yan, president cum CEO of CapitaLand Limited, said, “We see increasing investor interest in Southeast Asia, particularly in Vietnam. CapitaLand is positive about the growth trajectory of Vietnam and foresees that this trend will continue for at least the next ten years. Besides the growing demand for residential properties with urbanisation, we also see strong potential upside in the commercial real estate sector, given the mismatch between the supply and demand of quality office space.”
“CVCFI brings us a step closer to our goal of raising funds with US$7.34 billion in total assets under management by 2020. It comes on the back of our largest private equity partnership, the US$1.5-billion Raffles City China Investment Partners III, which invests in prime integrated developments in gateway cities in China,” Lim added.
CapitaLand has been considering Vietnam its focus in recent years, and in January this year, CapitaLand made its first foray into commercial real estate through the acquisition and development of an international Grade A office tower in the central business district of Ho Chi Minh City which will feature a direct connection to an upcoming metro station.
With the completion of this development in 2020, CapitaLand plans to continue to diversify their portfolio and strengthen their foothold in the country.
Vietnam is the third largest market for CapitaLand in Southeast Asia, after Singapore and Malaysia. CapitaLand has nine residential developments, 22 serviced residences with over 4,700 units, and one international Grade A office development across six cities in Vietnam.