Singapore-based Keppel Land has expanded its presence in Vietnam by acquiring a 49% interest in three residential sites in Hanoi for 2,715 billion dong (US$119.47 million).
The deal was made through its wholly-owned subsidiary Keppel Land Vietnam Properties, together with Keppel Vietnam Fund (KVF) and a co-investor of KVF, which entered into binding heads of agreement with Phu Long Real Estates Joint Stock Company (Phu Long) and its subsidiary An Khanh New City Development Joint Venture Company.
It marks the first acquisition by KVF since it achieved first closing of US$400 million. The fund is managed by Alpha Investment Partners, a private fund manager under Keppel Capital.
Totalling 14.2 hectares, the sites, located in Mailand Hanoi City, Hoai Duc District, Hanoi, comprise two plots zoned for housing development and one plot for a high-rise condominium. The necessary development approvals, including the masterplan and land use right certificates for the three sites, have been obtained.
Upon completion of the deal, expected by the third quarter of 2022, the Keppel consortium and Phu Long plan to jointly develop about 1,260 homes, including 1,020 condominium apartments and about 240 landed units. The total development cost for the project, inclusive of land cost, is estimated to be over 11,500 billion dong.
The project is part of the nearly 300-hectare Mailand Hanoi City, which is envisaged as 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. Mailand Hanoi City is located in Hanoi’s western growth corridor, about 15 kilometres from the Old Quarter and is 6km or a 10-minute drive from Hanoi’s new central business district in Cau Giay District.
Keppel Land has been in Vietnam since the early 1990s and has grown to become one of the largest foreign real estate investors in the country.
Beyond iconic projects such as Saigon Centre in Ho Chi Minh City, Keppel Land also developed several projects in Hanoi over the years, including International Centre, Sedona Suites Hanoi and Vietcombank Office Tower. It has also partnered with Phu Long since 2019 to develop four residential developments in Saigon South, Ho Chi Minh City.
The latest deal 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 December 31 2021 and the current financial year.