CapitaLand

CapitaLand: (S$3.25) Expanding into Vietnamese offices
CapitaLand is looking to broaden its scope into Vietnam’s office property segment, beyond its current portfolio of residential development and serviced apartments in the emerging economy.

Aside from acquiring land, the group is looking to buy completed office buildings, particularly if the building has the potential for future asset enhancements.

This comes as CapitaLand faces an office supply glut on domestic soil, with the Marina Bay region experiencing the most weakness in end-2016/early-2017, on the back of lower demand from tenant relocation to decentralised areas.

Market observers are of the view that Vietnam's property market is riding into a boom, backed by the government’s push to ease restrictions on overseas buyers.

Underlying demand is also expected to stem from the country's middle class, which has benefited from the country's 6.3% growth bagged in 1H15, its fastest since 2008.

CapitaLand currently has eight residential projects in Vietnam with a total of 4,114 units launched, of which 3,181 (77%) has been sold. The group also manages 2,464 serviced apartment units in the country.

CapitaLand is currently trading at a 21.5% discount to its NAV of $4.14. The street is relatively bullish on the counter with 17 Buy and 4 Hold ratings with a consensus TP of $3.91.