Keppel Land acquires third township site in Ho Chi Minh City
New township site secured in exchange for construction of social housing in pioneer government-led initiative
Keppel Land Limited, through wholly-owned subsidiary Flemmington Investments Pte Ltd (Flemmington Investments), has entered into a joint venture with local developers Tien Phuoc Co., Ltd (Tien Phuoc) and Tran Thai Co., Ltd (Tran Thai) to develop a waterfront residential township in Ho Chi Minh City's (HCMC) popular District 2.
This is a pilot programme which will be developed in phases. The developer will build and transfer to the city a social housing project of about 1,800 apartments. In return, the city will assign to the developer a 30-ha cleared site, zoned for waterfront development.
The prime cleared site, located at South Rach Chiec in District 2, is Keppel Land's third township in Vietnam. It is also the second collaboration between Keppel Land and Tien Phuoc, the first being The Estella, a 1,393-unit condominium development also in District 2.
"Keppel Land was able to leverage its reputation in Vietnam and its strong relationships with local authorities and strategic partners to secure another large site to meet demand for its homes and build up its quality portfolio.
"There is a growing middle-class who has become more discerning in their choice of residences and where they set up their businesses. Our new township will allow us to tap on our experience to masterplan and develop a desirable live-work-play environment and lifestyle for our residents," said Mr Ang Wee Gee, Executive Director and Chief Executive Officer (International), Keppel Land International Limited.
Flemmington Investments' 42% stake in the project amounts to US$16.0 million (approximately S$22.3 million) of the total registered capital of US$38 million (approximately S$53.2 million), while local partners Tien Phuoc and Tran Thai hold the remaining 38% and 20% respectively.
The waterfront township is envisioned to be sustainable and a vibrant community comprising about 4,700 homes and with a potential gross floor area of about 1 million sm. The first phase of the development is expected to be launched in 2011.
The site in South Rach Chiec enjoys more than two km of river frontage and is just eight km from the Central Business District (CBD). Travelling time to the CBD will be reduced to less than 15 minutes upon completion of the Thu Thiem Tunnel, East-West Highway and HCMC-Long Thanh Expressway - which are all currently under construction - over the next two years.
Meanwhile, Keppel Land's waterfront villa development, Riviera Cove has received positive response. About 80% of 60 select launched villas was taken up within a month of its launch in mid-November 2009, at an average selling price of about US$680,000 per unit. The remaining units will be progressively launched in the first quarter of 2010.
Comprising a total of 96 villas in District 9, Riviera Cove is Keppel Land's second villa project in HCMC. The first, Villa Riviera, located in District 2, saw all 101 units sold within a year of its launch in 2006.
The above transaction is not expected to have any significant impact on the net tangible asset per share or earnings per share of Keppel Land for the financial year ending 31 December 2010.
About Keppel Land Limited (Keppel Land)
With its first mover advantage, Keppel Land is one of the largest real estate investors in Vietnam, with a quality portfolio of 14 properties comprising prime office developments and residential properties, as well as award-winning serviced apartments.
This includes International Centre and Sedona Suites Royal Park in Hanoi, and PetroVietnam Towers in Vung Tau. In HCMC, Keppel Land is currently developing The Estella, a prime 1,393-unit condominium development in District 2, and Saigon Centre, poised to be an iconic architectural landmark comprising premier office buildings, serviced apartments and retail components. The Company's first township, Saigon Sports City, is an integrated residential, commercial and recreational sporting hub on a 64-ha site located in District 2. The other is a 367-ha waterfront residential township in Dong Nai Province, HCMC.
About Tien Phuoc Co. Ltd. (Tien Phuoc)
Tien Phuoc Company Limited has been recognized as one of the most reputable real estate investors and developers in Vietnam. Established in 1992, Tien Phuoc has proven its success through numerous projects in the region including Greenfield Village; Tien Phuoc South Saigon Residential Complex; Le Meridien Saigon Tower (a hotel cum office mixed-use development); The Estella; Cam Ranh Bay Resort and Spa; and Tien Phuoc Building.
About Tran Thai Co. Ltd. (Tran Thai)
Established in 2001, Tran Thai is involved in a wide spectrum of real estate development and construction. Its portfolio includes Tran Thai Phuoc Kien residential project and Van Thanh high-rise condominiums.