Temasek-backed CapitaLand likely to buy Vinhomes property assets

Singapore real estate giant CapitaLand Group is in talks to acquire assets worth roughly $1.5 billion from Vietnam’s biggest listed property firm Vinhomes JSC, a subsidiary of the country’s largest conglomerate Vingroup, according to Reuters.

Discussions between CapitaLand, majority owned by Singapore state investor Temasek Holdings, and Vinhomes have taken place for some projects owned by the latter, the news wire service reported Friday, citing four sources without naming them due to the sensitivity of the matter.

Vinhomes, with its property assets across Vietnam, is listed on the Ho Chi Minh Stock Exchange (HoSE) as VHM and has a market value of $8 billion as the country’s biggest real estate developer by market capitalization.

A deal of the size Asian leading group CapitaLand and Vinhomes are discussing would mark one of the largest real estate transactions in Southeast Asia in the last few years.

One of the four sources, according to Reuters, said the Singaporean giant is considering buying part of Vinhomes’ Ocean Park 3 project, a 294-hectare resort city-style development near Hanoi, or another project in Hai Phong, about two hours’ drive from the capital. The person said that the value of the deal is being negotiated and the talks reached an advanced stage.

Vinhomes’ net profit dropped 26% to VND29 trillion ($1.23 billion) in 2022 from a year earlier, while total revenue declined 27% to VND62 trillion. Other units under the Vingroup roof include electric vehicle maker VinFast, which is eyeing an initial public offering in the U.S., where it is preparing to build an EV and battery manufacturing complex in North Carolina with $2 billion in initial investment.

The Vingroup chairman is Pham Nhat Vuong, a Forbes-listed Vietnamese billionaire.

CapitaLand Development (CLD), part of CapitaLand Group, sees Vietnam as a core market. The developer announced last July it was acquiring a mixed-use site of eight hectares in Ho Chi Minh City, Vietnam’s southern economic hub, to develop a project including over 1,100 high-end residential units and shophouses.

“We continue to expand in our core market Vietnam by securing another highly coveted site in Thu Duc of Ho Chi Minh City after our recent investment in Binh Duong and a memorandum of understanding with the government to invest in up-and-coming Bac Giang province,” CLD Vietnam CEO Ronald Tay said while announcing the deal.

“We will continue to seek more investment opportunities across various asset classes to strengthen our position as a leading developer in Vietnam,” he said.

CLD did not reveal the transfer price but disclosed the new project would have an estimated total gross development value of $720 million. By that time, CLD’s residential portfolio in Vietnam had more than 13,000 units in 17 properties, not including that investment.

CLD signed an MoU last February with Bac Giang province’s administration to develop the firm’s first industrial park, logistics park, and township in Vietnam in the northern province, with projected investment capital of around $1 billion. In December 2021, the company started its $242 million acquisition of a 19-hectare site in Binh Duong New City near HCMC from Vietnamese industrial property developer Becamex IDC for its first large-scale residential development in the country.

Vietnam is in the top 5 destinations for ultra-high net worth individuals (UHNWI) in Singapore seeking property investments abroad, global property services firm Knight Frank said in its latest Wealth Report earlier this month.

The fast-growing Southeast Asian nation is seen as one of the top value destinations for UHNWI in Singapore notably for the high value it offers, both in its cities and coastal and countryside destinations for property investments, said the report.

Ho Chi Minh City, Vietnam’s southern economic hub, ranks third for affordable luxury condominiums after Sao Paulo (Brazil) and Cape Town (South Africa). “It is proving such an attractive drawcard for investors from nearby regional countries,” the study said.