CAPITALAND, South-East Asia's biggest developer, is turning to Vietnam as growth slows in its home market of Singapore, after apartments at the company's first project in Ho Chi Minh City sold out in a day last June.
Demand for homes in a country of 85 million people is "great" and supply is not keeping up, CapitaLand's chief executive officer, Liew Mun Leong, said. CapitaLand, which has residential projects in 10 countries including China and Australia, is developing four sites in Vietnam where it expects to build as many as 2800 homes.
The company said recently that it was not interested in any Centro Properties' assets that may come up for sale.
"Vietnam will be what I saw in China 10 years ago," Mr Liew said in Singapore. "The total picture in terms of economic growth is very, very strong. I'd say it's the biggest market potential for me in South-East Asia outside Singapore." Last week CapitaLand said its fourth-quarter profit had risen by 49 per cent, led by home sales in its three biggest markets: China, Australia and Singapore.
The developer is turning to fast-growing markets with slowing economic expansion in Singapore, which faces the risk of a recession this year.
"Vietnam is going through a huge growth in the economy; the Government has been very pro-business and is welcoming foreign developers, so prospects are quite exciting," an analyst with Kim Eng Securities in Singapore, Wilson Liew, said.
"The impact will be even more visible in the next few years."
CapitaLand said that on one day last June, more than 400 people had queued to buy 273 units at "the Vista," a 750-home project in Ho Chi Minh City. The apartments were all sold by early afternoon.
A second set of apartments released for sale at the development also sold out within a day, the company said. The homes were priced at between $US1200 and $US1600 a square metre.
CapitaLand said last year that it may increase the number of homes it is building in Vietnam to 6000 in the next three years. The company also may consider developing offices and shopping and leisure centres.
The developer is seeking to expand abroad as price gains in Singapore are expected to slow. The Singapore Government cut the city's economic growth forecast for this year to between 4 per cent and 6 per cent earlier this month, revised from between 4.5 per cent and 6 per cent previously.
CapitaLand plans to offer 1000 homes at most in Singapore this year. Last year it sold 1430 homes.
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