Banyan Tree Holdings has closed its first real estate development fund on $283 million – shy of its original target of up to $400 million.
The Banyan Tree Indochina Hospitality Fund held a first close shortly after it was launched in January last year, securing $100 million in commitments. In a statement to the Singapore Exchange yesterday, the firm said it managed to raise $168 million in additional commitments during the second half of 2008, before finally securing one final investment of $15 million by the end of June this year.
The fund is set to focus on the hospitality sector in Vietnam, Cambodia and Laos.
The fund’s core asset will be the development of the Vietnamese resort of Laguna Hue, a complex comprising seven hotels, space, golf course, residential and retail outlets. The firm said the first phase of the 280-hectare beachside project, which will be funded without leverage, will begin in the second half of 2009.
When the Singapore-listed fund manager and developer announced the launch of the fund last year, it said the Indochina vehicle would seek between $300 million and $400 million in equity commitments, with a final close expected at the end of 2008.
The credit crisis has though resulted in an almost-freezing of private fundraising markets, with many fund managers now struggling to close vehicles currently in market. Large sponsors have been equally affected, with Merrill Lynch and Citi Property Investors both postponing plans for second Asia-focused property funds. Merrill Lynch is also in the process of selling the management of its first Asia opportunity fund.
Among the investors in Banyan Tree Indochina Hospitality Fund are HSIL Investments, a subsidiary of HSBC bank, and the conglomerate, the Nan Fung Group. The Indochina Fund has a maximum fund life of up to nine years. Banyan Tree said last year it would seek to exit the fund through an IPO or liquidation.