Capitaland Development (CLD), the development arm of CapitaLand Group, has divested its international Grade A office building in Hanoi Vietnam, for $751 million. The amount was said to be made at a premium to book value, with the divestment made to an unrelated third party, reveals CLD.
The office building, Capital Place, is held under the CapitaLand Vietnam Commercial Value-Added Fund (CVCVF), in which CLD holds a 50% stake in. The remaining interest is held by MEA Commercial Holdings.
CVCVF was incepted in 2017 with a fund size of $177 million, and is being managed by CapitaLand Investment (CLI).
Upon the completion of the transaction, CVCVF will be fully divested and closed, which will provide investors in the fund with an internal rate of return of 34%, almost triple the fund’s hurdle rate.
“The divestment of Capital Place is part of CVCVF’s exit strategy and in line with CLD’s on-going capital recycling efforts to unlock the strong underlying value of our properties,” says Ronald Tay, CEO of CLD (Vietnam).
The proceeds from the divestment will go into higher-yielding assets and as seed capital for future funds to be developed with CLI in Vietnam.
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“With CLI’s growing bench strength in private equity fund management and CLD’s deep experience in Vietnam, we will leverage our synergistic capabilities to launch new real assets private equity funds in Vietnam in the near future”, Tay adds.
“CLD firmly believes in Vietnam’s excellent growth prospects, and we are committed to being a long-term partner to the development of Vietnam’s real estate market. We continue to seek attractive real estate investment opportunities in offices, residential and urban developments, as well as in new economy assets such as logistics facilities, data centres and business parks,” he continues.
Shares in CLI closed at $3.68 on Jan 19.
Photo of Capital Place: CLD
