In the framework of investors conference held in HCM City last week, VinaCapital announced the launch of a US$50 million real estate-dedicated fund. Peter Dinning, managing director of VinaCapital Real Estate Ltd managed by VinaLand talks about the operation of this new investment fund in the following interview.
Can you introduce something about VinaLand?
VinaLand is the second investment fund in Vietnam after Vietnam Opportunity Fund (VOF) managed by VinaCapital and has initial capital of US$50 million. It will be listed on the London Stock Exchange like its sibling, the US$95 million VOF.
VinaLand will invest in real estate projects under many forms like investing 100% of capital in a project, buying shares of real estate Vietnamese companies in and participating in joint ventures.
Did VinaCapital have a specific plan when deciding to establish this new fund?
VinaLand invests in office building, apartment building, shopping centre and commercial centre. Besides, VinaLand also focuses in hotel in HCM City and Hanoi, resort at beautiful beaches of Vietnam, developing industrial parks to meet the manufacturing demand of domestic and foreign companies. However, we cannot reveal at this time which project VinaLand will participate in.
Before VinaLand was born, VinaCapital had invested in some real estate projects. Will these projects be transferred to VinaLand after the new fund was established?
Real estate projects that VOF has invested will continue to be developed under the management of VinaCapital but not transferred to VinaLand. VinaLand will only invest in future projects. However, to avoid VOF’s investors to be disappointed about this strategy, the executive council of VinaCapital decided to allow VOF to invest 25% of capital in those projects developed by VinaLand.
What do you evaluate the real estate market of Vietnam and how long will it take VinaLand to spend the whole US$50 million?
I have lived in Vietnam for eight-years and I spend most of my time here in real estate. Vietnam real estate market is very potential in all fields from houses, offices, hotels, industrial parks to commercial centres. There are many opportunities and US$50 million is not big. I hope the capital will be spent in nine-twelve months. After that, we will raise additional capital for further investment.
VinaLand is the second real estate investment fund after the US$42 million Indochina Land. Do you think this is a new trend of investment in this field?
The establishment of real estate investment fund is an evident trend in a market containing a lot of opportunities and requiring professional managers. I think many more fund will be established to meet the demand of the market.
The price of land in Vietnam is too high and the government is apparently trying bring prices down to more suitable levels. Do you have any comment on this issue?
Some think the land price of Vietnam is high, however, it is not high in comparison with Thailand, Indonesia and the Philippines. For a project, there are four factors related to each other including the land price, the construction price, the rent and the buying price. When the land price is high, the construction and buying price will be adjusted. We will consider this problem during investment.
However, what we are interested in when investing is the output of the product. We will cooperate with project manager and professional real estate manager to evaluate these factors.