(Bloomberg) -- KKR & Co. expects to at least triple its investments in Vietnam in the next decade as it seeks to capture rising demand from the Southeast Asian nation’s growing middle class.

The U.S. buyout firm’s investments in Vietnamese assets crossed $1 billion after a KKR-led consortium bought a stake in Vinhomes JSC, the largest real estate developer in the country, according to Ashish Shastry, co-head of private equity for KKR Asia Pacific and head of Southeast Asia.

The Vinhomes deal is KKR’s biggest in Vietnam since the private equity firm started investing there in 2011, he said in a phone interview Tuesday. “Our investments there could triple or quintuple in the next decade.”

Vietnam is one of the fastest growing economies in Asia, even as the coronavirus pandemic threatens to drag its gross domestic product growth below 6% in 2020, for the first time in six years. The country has become an alternative manufacturing hub to China, following rising tensions between the U.S. and the world’s second-largest economy.

Vietnam will be a beneficiary of a shift in supply chains arising from the trade disputes, Shastry said.

“The Vietnam story is exciting given its young and growing middle income group,” Shastry said.

There were 24 million middle income and affluent people in Vietnam in 2017, according to Boston Consulting Group. They estimate that by 2030 that figure could nearly double.

Shastry said the number one aspiration for the middle income class in Vietnam is housing. The penetration of modern types of housing, such as apartments, in Vietnam’s major cities is about 10%, he said, adding that it is at an inflection point similar to China 20 years ago. “We want to catch this wave,” he said.

The Vinhomes investment saw KKR leading a consortium, whose members include Temasek Holdings Pte., to take a 6% stake in the Vietnamese company for $650 million, according to a joint statement issued on Tuesday. A listed subsidiary of Vingroup, the firm develops and trades residential, commercial and industrial real estate.

Shares in Vinhomes have risen 8.6% since the deal’s announcement Tuesday. The stock is down 10.4% in the year to date, falling less than the benchmark Ho Chi Minh index’s 11.1% decline in the same period.

The Vinhomes transaction “will be the first of many more deals in Vietnam” for KKR, Shastry said.

(Updates with Vinhomes share performance in tenth paragraph.)

©2020 Bloomberg L.P.