Keppel Land will embark on a joint venture to develop a residential township on a 509 hectare site north-east of Ho Chi Minh City (HCMC) in Vietnam.

Keppel Land will embark on a joint venture to develop a residential township on a 509 hectare site north-east of Ho Chi Minh City (HCMC) in Vietnam. The initial stage of development of the site, occupying 193 ha, is estimated to cost over US$357 million and will be undertaken in phases.

Called the Dong Nai Township, this latest project highlights a stepped-up drive to increase Keppel Land’s presence in regional markets. Keppel Land’s director of regional investments, Ang Wee Gee, revealed that overseas profits now account for 64 per cent of Keppel Land’s earnings. He added: ‘We want to do this because we want to broaden our earnings base geographically.’

The new township development of about 14,000 units brings Keppel Land’s pipeline of new homes in township developments across Asia to 65,000 units.

‘Today, with a potential critical mass of some 150.8 million sq ft of gross floor area for the development of townships across the region, our strategy is taking flight. We are confident that our focus and edge in townships will thrust the company into its next phase of regional expansion, and create sustainable streams of income for our shareholders,’ added Mr Ang. It is a strategy that will also help Keppel Land reduce its exposure to any single market. ‘Property markets can be very cyclical,’ he noted.

The joint venture involves Keppel Land subsidiary Portsville Pte Ltd, the Dong Nai General Agricultural Service United Cooperative (DONA Co-op) and Vietcombank Fund Management (VCBF). Portsville will take a 45 per cent stake in the joint venture company amounting to US$32 million. DONA Co-op and VCBF will hold the remaining 55 per cent.

The first phase of Dong Nai Township development is expected to be launched in 2009. It will be Keppel Land’s second township in Vietnam. Its first residential township, Saigon Sports City, is on a 64 ha site in HCMC.

Keppel Land also announced yesterday that it had signed memorandums of understanding (MOUs) to form joint venture companies to develop two residential townships in Hanoi.

One of the proposed joint venture projects is a township development on a 407 ha site in Long Bien District. The other development comprises two parcels totalling 949 ha and is located in the Dong Anh District.

Other smaller smaller projects in Vietnam include a high-end condominium in HCMC called The Estella.

The 101-unit waterfront villa development, Villa Riviera, in HCMC was launched in 2006 and fully sold out at between US$400,000 and US$1.5 million per unit.

For the whole region, Keppel Land says it has 78,500 residential units ready for launch from now to 2009. Ongoing launches include the 12,000-unit Taman Sutera in Johor, Malaysia; and the 5,800-unit Botanica in Chengdu, China. The 3,000-unit Saigon Sports City in HCMC, Vietnam; the 7,000-unit Jakarta Garden City in Indonesia and the 4,700-unit Wuxi Township in Wuxi, China will be launched in the second half of this year.

Source: The Business Times, 11 July 2007