Keppel eyes rich and beautiful

Saigon Sports City will be Ho Chi Minh City’s first ‘healthy lifestyle’ complex

High-standard villas for sale will be developed on a 5.9ha site in the well-established residential area of An Phu Ward in District 2. One-hundred-and-thirteen units, with plots ranging from 300 to 550sqm, will be built.
Targeted at the upper income market, the complex will feature amenities such as views of the Saigon River, 24-hour security services, and a clubhouse, gymnasium, swimming pool and tennis court.
It is slated for completion in 2006 with sales expected to begin in the second half of 2004.
Keppel Land has also teamed up with Hong Kong-based Chiap Hua Group to develop a residential estate on a 74.7ha site in Ho Chi Minh City.
The $130-million Saigon Sports City will comprise housing, supporting commercial complexes and a 15ha area designated for public sports facilities. In exchange for land-use rights, the joint venture will develop the public sports facilities over 10 years.
The first phase, comprising about 250 units of high-rise apartments with proximity to many sports and recreational facilities, will be launched in the first half of 2005 to cater to the upper income market.
The company said the project was positioned to meet the growing demand for well-planned residential estates in the city and will be the country’s first “healthy lifestyle” complex.
Keppel Land will hold a 90 per cent stake in the joint venture company, and the Chiap Hua Group will hold the remaining 10 per cent. The joint venture will build another 250 apartments in a second phase to be launched in the second half of 2006.
“The local housing market has seen tremendous changes,” said Linson Lim, Keppel Land chief representative in Vietnam. He said there was a need for upmarket housing as a result of the expanding economy and Viet Kieu (Overseas Vietnamese) hard currency remittance.
Keppel’s new residential projects represent a breakthrough in the property market for sales to Vietnamese in Ho Chi Minh City, where Phu My Hung Corporation had been the only foreign-backed company to secure a licence in the business.
In addition to Keppel Land, another joint venture has received a licence to invest $56 million in an office and apartment complex for sale and lease in the second city.
The Vietnam Land SSG, a joint venture between the local SSG Real Estate and Construction Company and Hong Kong’s Vietnam Land, will build two 38-storey apartment towers in Nguyen Huu Canh Street.
Other Hong Kong, Korean and Chinese companies are also looking for opportunities to join the market.
Marc Townsend, managing director of CB Richard Ellis, said the vast majority of foreign investors were looking at the residential market for sale while the buying public has embraced the concept of buying off the plan during construction.
He said this practice, common in Bangkok, China, Hong Kong and Singapore where banks are happy to lend up to 70 per cent of the value of the property, represents the most lucrative opportunity for foreign developers, as there is a clear exit strategy.
“Before they had to hold property in a joint venture for 50 years. Now they can make money quickly and move onto the next project within three years,” he said.
“I have no doubt that within 12 months we will see high quality residential developments with foreign participation in Ho Chi Minh City and Hanoi,” he added.
Despite these positive predictions, other problems for foreign developers in the property market remain. Keppel’s Lim pointed out that Vietnam’s property market presented challenges such as high land prices in good locations and complicated and time-consuming compensation procedures.
Dinning & Associates director Neil Thurston said Vietnam’s property market remains non-liquid as often one company deals with the whole process of securing land and compensation, developing properties and selling them, while in other countries there are three parties involved.
Thurston also blamed the Vietnamese property market’s non-transparency on the lack of information on market fundamentals, financial disclosure and governance and availability of investment indices.