Keppel Land unit in consortium to acquire 3 residential sites in Hanoi

A CONSORTIUM of Keppel Land's unit Keppel Land Vietnam Properties, Keppel Vietnam Fund (KVF) and a co-investor of KVF is planning to acquire a 49 per cent interest in 3 residential land plots in Hanoi for an aggregate consideration of 2,715 billion dong (S$159.7 million).

The consortium has entered into a binding heads of agreement with real estate company Phu Long Real Estates Joint Stock Company, a subsidiary An Khanh New City Development Joint Venture Company for the acquisition, Keppel Corp BN4 : BN4 0% announced in a press statement on Saturday (Jan 22).

The 3 sites totalling 14.2 ha comprise 2 land plots zoned for landed housing development and 1 land plot for a high-rise condominium. The necessary development approvals, including the masterplan and land use right certificates for the 3 sites, have been obtained, Keppel noted.

The transaction is expected to be completed by the third quarter this year. Following that, the consortium and Phu Long plan to jointly develop a total of about 1,260 homes, comprising 1,020 condominium apartments and about 240 landed homes. The total development cost for the project, including land cost, is expected to be over 11,500 billion dong (S$680 million).

Joseph Low, president (Vietnam) of Keppel Land, said there is a strong demand for "thoughtfully designed and high-quality homes" among discerning homebuyers in Hanoi.

"In line with Keppel's asset-light business model under Vision 2030, Keppel Land Vietnam is investing in this project alongside KVF and its co-investor, allowing us to tap third party funds for growth through collaborating with Keppel Capital," said Low.

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The project is part of the nearly 300 ha Mailand Hanoi City, which will potentially be developed into a modern township with multi-functional areas comprising landed developments, high-rise condominiums, mixed-use complexes, schools, hospitals and green spaces.

As part of the agreement, Keppel Land has the rights of first offer for the development of the township's subsequent phases.

Phung Chu Cuong, general director of Phu Long, said: "As a leading, reputable real estate company in Vietnam, Phu Long invests and develops large-scale projects in strategic cities and popular tourist attractions such as Ho Chi Minh City, Hanoi, Da Nang, and Nha Trang. We are honoured to once again partner a regional powerhouse, Keppel Land, in developing creative and safe urban areas, while preserving cultural heritage, applying technology, and protecting the environment."

Keppel Land has had a presence in Vietnam since the early 1990s. Apart from projects such as Saigon Centre in Ho Chi Minh City, Keppel Land also developed the International Centre, Sedona Suites Hanoi and Vietcombank Office Tower in Hanoi.

It has also partnered with Phu Long since 2019 to successfully develop four residential developments in Saigon South, Ho Chi Minh City.

This transaction is not expected to have any material impact on the earnings per share and net tangible asset per share of Keppel Corporation for the financial year ended Dec 31, 2021 and the current financial year.

Shares of Keppel Corp ended Friday (Jan 21) at S$5.38, up S$0.07 or 1.3 per cent.

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