18.03.2023, 08:25

Singapore’s CapitaLand in talks to Vietnam’s Vinhomes property assets


Asian 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 (VHM.HM), two sources familiar with the matter told Reuters.

CapitaLand Group, the Asian real estate giant majority-owned by Singapore state investor Temasek Holdings, is in talks to purchase assets worth approximately $1.5 billion from Vinhomes JSC, Vietnam’s largest listed property firm, two sources familiar with the matter told Reuters.

According Reuters, the sources have indicated that discussions have taken place for the acquisition of certain projects owned by Vinhomes.

The deal, still being negotiated, would mark one of the largest real estate transactions in Southeast Asia in recent years.

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Vietnam’s property sector is experiencing a cash crunch due to an anti-graft campaign by the government last year, and Vinhomes’ net profit fell by 26% to 29 trillion dong ($1.23 billion) in 2022 compared to the previous year.

Tube houses in Hanoi @ AFP PHOTO

CapitaLand Development, a part of CapitaLand Group which has a presence in 40 countries, already has a portfolio of residential projects, including luxury condominiums, in four cities in Vietnam.

Vietnam is one of CapitaLand Development’s core markets, and the company is constantly evaluating investment opportunities to grow its presence in the country. However, when contacted by Reuters, CapitaLand Development did not directly comment on any potential deal with Vinhomes.

Vinhomes develops and owns residential and commercial real estate projects in Vietnam, a country which has a population of 100 million and was Asia’s fastest growing economy last year. The economy expanded by 8% last year, the fastest pace in 25 years, backed by strong retail sales and exports, but is facing headwinds from a global slowdown.

The property crisis that started last year, sparked by problems at one of the country’s largest property groups, No Va Land, has battered investor confidence as authorities arrested high-level individuals and overhauled the country’s bond sector.

Shares of Vinhomes have lost 10% so far this year, after tumbling 40% in 2022 as the property crisis deepened. Vingroup, which is involved in real estate, automobiles, and retail, is investing billions of dollars to develop VinFast, its fledgling electric vehicle carmaker. Vinhomes was spun off and listed on the local stock exchange in 2018.

Vingroup declined to comment on any discussions with CapitaLand, but said that as a listed company it would disclose information if any transactions happen. The sources declined to be identified due to the sensitivity of the matter.