South-east Asia’s largest property developer, CapitaLand, is undergoing a major expansion in Vietnam, doubling its property investment in the country to nearly $3.5 billion (US$2.5 billion) for the next three to five years.
The property giant announced that it wanted to develop affordable residential units targeting the lower 30 percent to 50 percent of the total population in Ho Chi Minh City and Hanoi.
"We have roughly 4,000 apartments to build. What we want to do is to increase this rapidly. (About) 500,000 people every year need housing," said Liew Mun Leong, president and CEO of CapitaLand. "That translates into about 120,000 homes."
Mr. Liew visited Hanoi for the signing of the memorandum of understanding between The Academy of Managers for Construction and Cities and CapitaLand Vietnam.
Mr. Liew noted that the current residential supply available for Vietnam’s lower-income household group is only 18,000 units, which is insufficient to meet the housing demand needed for this sector of the population.
CapitaLand spends US$1.2 billion in property development in the country, and plans to develop shopping malls.
"Vietnam is progressing to the next stage of urbanisation. Our vision is to build shopping malls, first, for what we call necessity shopping. It’s not Ion in Singapore, it’s not Takashimaya.”
"It’s Tampines Mall, IMM, Bugis Junction," said Mr. Liew.
The company plans to introduce mixed developments in the country similar to the Raffles City integrated project in Singapore, which houses office, residential units and shopping malls.
However, CapitaLand stressed that it is not keen to build office space in Vietnam, saying that there is an oversupply in places such as Ho Chi Minh City.
In the serviced apartment space, CapitaLand’s unit, Ascott Group, said that it will invest US$100 million over the next three years to double the number of its residential units in Vietnam to about 1,800 homes.
Ascott said that demand will increase if infrastructural investments come in from foreign firms.
"People who are moving into these assignments require long stay accommodations and service apartments would be the right type of accommodation that would house this group of people," said Mr. Alfred Ong, Ascott’s managing director for South-east Asia and Australia.