Protego Real Estate Investors LLP announces that it is about to commence the formal marketing of the Protego Qudos Vietnam Property Fund. Protego is seeking to raise up to $200 million equity, by end June 2008, the closing date. Protego's partner for the fund is Qudos Asia Limited, a Vietnam based real estate development company. Qudos has a sister company, HBP Group, a project and construction management company, which was established in 1994. HBP has offices in Ho Chi Minh City (HCMC), Hanoi and Danang.
In total, Qudos and HBP have circa 80 staff located in Vietnam, with all the requisite development skill sets in-house and, importantly, particularly in Vietnam, project delivery capability, through HBP.
Both Qudos and HBP are highly experienced operators in Vietnam, with long and successful track records. They are widely recognized in Vietnam as the leading operators in their country and their client list is testament to this.
The fund is a residential development fund, targeting luxury apartments in prime urban locations, residential estates in prime suburban and coastal locations, along with boutique branded resorts and villas, to cater for the rapidly expanding tourism market in Vietnam. The fund can only invest up to a maximum of 10% in core resort holdings. A minimum of 80% must be invested in residential projects.
The fund has secured five projects, which comprise the seed portfolio. The significant majority of the seed portfolio will be apartments in central HCMC. Both Qudos and HBP have established a reputation in particular with the various government departments in Vietnam, for successfully delivering this type of residential project to the HCMC market.
Key drivers for Vietnam include the stability of Vietnam as a country, the attractive GDP growth rates (second only to China in a global context), as well as the favourable demographic backdrop.
The fund is a US denominated eight year, closed ended, private fund, with a target return of 25% + net IRR, to investors. The fund close date is 30 June 2008.
Frederike van Lowijde, Director of Business Development at Protego said: "What is happening in Vietnam is very exciting. The central Vietnamese government is pursuing a supportive and reformist agenda, which culminated in Vietnam joining the Wealth Trade Organisation last year. It is a stable country, second only to China according to BMI, with the second or third highest GDP growth rate in the world, depending on who you speak to, with an extremely favourable demographic profile.
"Vietnam is the 13th largest country in the world, by population, at 85 million, and this will grow to 100 million by 2025. 65% of the highly skilled and educated population is under 30 and there is a 94% literacy rate. Unsurprisingly, there has been significant inward investment, as the economy changes from a primary exporter of agricultural goods, to a manufacturing economy and now a rapidly expanding electronics and software industry. As a result, Vietnam is shifting rapidly up the value curve. FDI exceeded $21 billion in 2007.
"Protego recognised the opportunity in Vietnam some 18 months ago. We then spent a considerable amount of time there, meeting the local operators and were fortunate to spend time with the Qudos and HBP teams last summer. Qudos and HBP are widely considered to be the leading real estate developer and project delivery group respectively in Vietnam. For that reason, Protego is fortunate in establishing the fund with such experienced partners. Protego will provide the structure, discipline, process and reporting that institutional investors from the UK and mainland Europe will expect, whilst Qudos will provide the on the ground expertise.
"We have set ourselves an ambitious close date of 30 June 2008. Bearing in mind the skill sets, experience and track record of our partners in Vietnam, we expect to raise $200 million, within that timescale."
John Caffin added: "The next few years will be interesting ones across the spectrum of the Vietnam property markets. The key drivers