CapitaLand Development divests its Grade A office building Capital Place in Hanoi for S$751 million

In line with CapitaLand Development's capital recycling strategy
By: CapitaLand
SINGAPORE - Jan. 20, 2022 - PRLog -- CapitaLand Development (CLD), the development arm of CapitaLand Group, has announced the divestment of Capital Place, its international Grade A office building in Hanoi, Vietnam for S$751 million (US$550 million) to an unrelated-third party.  Capital Place is held under the CapitaLand Vietnam Commercial Value-Added Fund (CVCVF).  CLD holds a 50% stake in CVCVF while the remaining interest is held by MEA Commercial Holdings Pte. Ltd. CVCVF was incepted in 2017 with a fund size of S$177 million (US$130 million).  The fund is managed by CapitaLand Investment Limited (CLI), the real estate investment management business of CapitaLand Group and a leading global real estate investment manager.

The agreed value of the property was arrived on a willing-buyer and willing-seller basis.  Upon completion of the transaction, CVCVF will be fully divested and closed, providing investors in the fund an internal rate of return, net of fees of 34%, almost triple the fund's hurdle rate.  The fund was also able to access regional debt markets to obtain an efficient capital structure which further boosted the fund's returns.  This stellar result will generate carried interest of S$23 million (US$17 million) to CLI and provides a strong track record for CLI's future private equity funds.

Mr Ronald Tay, CEO of CLD (Vietnam) added: "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.  Tapping on the synergies of our ONE CapitaLand ecosystem and working closely with CLI, we have successfully created value for our capital partner through our real estate development and asset management capabilities, divesting the prime asset at a premium to book value.  CLD will redeploy the proceeds from this divestment into higher-yielding assets and as seed capital for future funds to be developed together with CLI in Vietnam."

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Industry:Real Estate
Location:Singapore - Singapore - Singapore
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