» » » CapitaLand signs Conditional Joint Venture Agreement for fifth residential project in Vietnam

VNRE - CapitaLand, through its wholly-owned subsidiary, CVH Cayman 10 Limited, held through another wholly-owned subsidiary, CapitaLand (Vietnam) Holdings, has signed a Conditional Joint Venture Agreement (“JVA”) with No Va Land Investment Group Corporation (“NovaLand”), a leading real estate developer in Vietnam, to jointly develop a residential site in District 9, Ho Chi Minh City, Vietnam. The signing ceremony held in Hanoi today was witnessed by Singapore Prime Minister Lee Hsien Loong and Vietnam Prime Minister Nguyen Tan Dung.

The approximately 9,000-square-metre site is located in Phuoc Long B Ward in Ho Chi Minh City’s District 9, an established populous area with amenities such as a supermarket, vocational school and planned sports and recreational facilities. CapitaLand and NovaLand plan to develop the site, located about 10 kilometres from the city’s Central Business District, into a residential development with approximately 500 apartments.

The residential development has an estimated total project development cost of US$40 million (approximately S$54.5 million). The incorporation of the joint venture company is subject to relevant approvals from the Ho Chi Minh City People’s Committee and the Ministry of Planning and Investment of Vietnam for the issuance of a foreign investment certificate. Upon approvals being obtained, CapitaLand will take a 70% stake in the project while NovaLand will own the
remaining 30% stake from the injection of the site into the joint venture.

Mr Chen Lian Pang, CEO (Southeast Asia) of CapitaLand Commercial Limited and CEO of CapitaLand (Vietnam) Holdings, said, “We are confident of the outlook in Vietnam, underpinned 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.”

Mr Chen added, “We are pleased to partner NovaLand in our fifth residential project in Vietnam. NovaLand is a reputable developer that possesses deep domain knowledge and an extensive network in the local real estate realm. 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.”

Mr Bui Thanh Nhon, Chairman of No Va Land Investment Group Corporation, said: “This is our first collaboration with a foreign developer and we are pleased to partner CapitaLand, one of Asia’s largest real estate companies. With CapitaLand’s international experience and strong proven track records in real estate development and project management as well as real estate financial services, we are able to leverage on each other’s expertise and domain knowledge. We are confident that our first residential project in collaboration with CapitaLand will be successful and we hope that this will be the start of a fruitful and win-win partnership for more projects in the future.”

The site is strategically located at Do Xuan Hop Street, Phuoc Long B Ward in District 9, at the fringe of the city centre in Ho Chi Minh City. The development sits close to the future Ho Chi Minh - Long Thanh Highway and Hanoi Highway. It is within close proximity to the proposed Saigon Sport City & Saigon Golf Mixed-use Development projects, as well as Ho Chi Minh Vocational College of Technology and Saigon Hightech Park.

Site Location

The above transaction is not expected to have any material impact on the net tangible assets or earnings per share of CapitaLand Group for the financial year ending 31 December 2010. None of the Directors or the controlling shareholder of Capitaland has any interest, direct or indirect, in the above transaction.

About CapitaLand in Vietnam

Vietnam is a key market in Asia for CapitaLand Group. Vietnam is the Group’s fourth pillar of growth, in addition to its core markets of China, Singapore and Australia. The real estate market is supported by the country’s strong economic growth, stable government, coupled with rapid urbanisation and a young and growing population. CapitaLand is committed to being a long-term real estate player in Vietnam.

Currently, the Group's presence in Vietnam is in Ho Chi Minh City, Hanoi, Hai Phong 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, making it the largest international serviced residence owner-operator in Vietnam.

About Nova Land Investment Group Corporation

Nova Land Investment Group Corporation (“NovaLand”), formerly known as “Thanh Nhon Trading Ltd.” established in 1992 and merged in 2004, is the real estate investment and development arm fully owned by Nova Investment Group. NovaLand is one of the most prominent real estate development groups of international stature in Vietnam. NovaLand is helmed by a professional team and focuses on large scale and premium projects in good locations. Fanning out of Ho Chi Minh City, NovaLand has development interests in urban areas, resorts, residential, offices and commercial projects.

NovaLand’s flagship project is Sunrise City, a premium 500,000 square-meter mega-mixed development situated in District 7 of Ho Chi Minh City with an investment capital exceeding US$500 million.

The member companies of NovaLand include The Novaland Company, Thanh Nhon Real Estate Company, Novaland Thao Dien Company, Novaland Vidiphar Company, Novaland My Dinh Company, Novaland Long Thanh Company, Novaland Phuc Long Company, Dong Tay Real Estate Company and Novahomes Company. NovaLand has a robust chartered capital of VND 1,200 billion and is slated for listing on the stock exchange in 2011.

About CapitaLand Group

CapitaLand is one of Asia’s largest real estate companies. Headquartered and listed in Singapore, the multi-local company's core businesses in real estate, hospitality and real estate financial services are focused in growth cities in Asia Pacific and Europe.

The company's real estate and hospitality portfolio, which includes homes, offices, shopping malls, serviced residences and mixed developments,spans more than 110 cities in over 20 countries. CapitaLand also leverages on its significant asset base, real estate domain knowledge, financial skills and extensive market network to develop real estate financial products and services in Singapore and the region.

The listed entities of the CapitaLand Group include Australand, CapitaMalls Asia, CapitaMall Trust, CapitaCommercial Trust, Ascott Residence Trust, CapitaRetail China Trust, CapitaMalls Malaysia Trust and Quill Capita Trust.

Source: CapitaLand Group

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