VNRE - EXS Capital, an independent investment firm dedicated to the Asia Pacific based in Hong Kong and Japan recently announced its first investment of $37 million into domestic real estate firm Son Kim Land.
Kiyoshi Hirasawa, CEO of EXS Capital based in Japan told VIR that the company had interviewed around 30 companies active in the real estate sector in Ho Chi Minh City and decided to choose Son Kim Land for its first investment in Vietnam.
“While Son Kim Land is not as large as some other companies, we valued Son Kim’s good reputation, the integrity of the company’s chairman Nguyen Hoang Tuan, and the quality of the management team and company’s projects in Ho Chi Minh City’s Districts 1 and 2,” Hirasawa said.
He said that as always, location was a prime consideration when it came to real estate. “We will be interested to see how the new metro lines will change traffic flows around Ho Chi Minh City,” he said.
The investment, Hirasawa said, would be used to fund existing Son Kim Land projects as well as other opportunities, including the acquisition of projects from other developers.
“This is our first allocation, after spending more than 12 months studying the market and putting together investment terms that work for the company and our investors. The first case is always the most time-consuming, and we expect to be able to move very quickly from now on,” he added.
“We think the demographics of Vietnam and the recent emergence of Vietnam as a preferred manufacturing location and logistics hub in Southeast Asia for international corporations support potential high growth in the real estate sector,” said Hirasawa.
Over the past few years, he said, the real estate sector had suffered turmoil in the financial markets, but in the longer term he believed that the natural strengths of the Vietnamese market should shine through.
EXS Capital began focusing on Vietnam in late 2011, viewing it as a fundamentally strong economy suffering from temporary market dislocations. It saw similarities between Vietnam’s capital crisis of 2010-2012 and China’s economic crises in 1994-1995 and 2003-2004, when China’s strong demographics and growth story were obscured by challenging fiscal policies and financial dislocation.
In addition to the initial $37 million, EXS Capital may increase its investment to $50 million, with an option to increase investment to $80 million based on the potential of the Vietnamese real estate market.
“Further investment will be used to fund Son Kim Land’s real estate projects which will include hotels, retail and office space in addition to housing. In addition to that, we will be interested to consider opportunities in other sectors where growth will be driven by demographics and economic development,” Hirasawa said.
Son Kim Land is the real estate development arm of the Son Kim Group, which originally found fame as a Vietnamese clothing dynasty which was founded in the 1950s. Today the Son Kim Group is a leading retailer with over 400 stores across Vietnam, and an OEM manufacturer of women’s lingerie for brand names such as Jockey, Vera, J.Buss and WOW. It currently has a joint venture partnership with South Korea’s GS Shop to operate one of the leading home shopping networks in Vietnam, and is the local operator of SB Furniture.
Son Kim Land has six development projects in the pipeline, including two large scale mixed-use developments comprised of apartments, serviced apartments, retail and office space located in the centre of Ho Chi Minh City. Son Kim Land is also developing a high-end residential building in the city’s District 2. Son Kim’s other pipeline projects include a hotel and a mixed-use commercial and office development in District 1, and a luxury beach resort.
By Bich Ngoc | VIR