Capitaland expanding in Vietnam?

CapitaLand, Southeast Asia's biggest developer by sales, said it will form a $300 million fund to invest in Vietnam property and plans an alliance with Nam Thang Long Investment Joint-Stock to expand in the nation.

CapitaLand plans to take a 30 percent stake in the fund, its first in the Southeast Asian nation, and has signed a preliminary agreement with Citi Private Bank for the fund, it said in a statement to the Singapore stock exchange.

“We see vast opportunities in the Vietnam real estate market, driven by the country's strong macro-economic growth and rapid urbanization,” Chief Executive Officer Liew Mun Leong said in the statement. “Our aim is to deepen CapitaLand's presence in Vietnam to become a significant long-term real estate player.”

Vietnam's economy expanded 8.5 percent in 2007, the fastest pace since 1996, after the country joined the World Trade Organization last year. CapitaLand is turning to Vietnam, Liew said in a interview with Bloomberg Television, as growth slows in its home market of Singapore,

The Singapore-based developer also signed an agreement with Nam Thang Long to jointly develop residential and so-called mixed- used properties in Vietnam, the statement said.

Will these plans enable Capitaland to grow in the long term?