Gamuda buys RM1.5b mixed-use land in Vietnam with RM5.1b GDV


GAMUDA Bhd has made a significant foray into the Vietnamese real estate market with the acquisition of a 9.1 acres mixed-use plot of land in Ho Chi Minh City, Vietnam.

Through its subsidiary, Gamuda Land, the company entered into a share transfer agreement to purchase a 100% equity interest in Tam Luc Real Estate Corporation, securing the strategic project land at a purchase price of approximately US$315.8 million or RM1.47 billion, as stated in a bourse filing.

The project land, a shovel-ready mixed-use high-rise development site with all necessary planning approvals, is strategically located in Thu Duc City, an area gazetted as the Innovation Hub of Ho Chi Minh City.

Gamuda said the plan is to develop the land into a mixed-use high-rise project.

With a projected GDV of US$1.1 billion or RM5.1 billion, it comprises 1,968 exclusive apartments, 12 penthouses, 51 podium shops and 21 shophouse units across 6 towers of up to 40 levels, all fully developed and sold within five years.

Gmauda sid the target positioning for the development will be in the ‘high-end’ category.

It said that the market segment has a pricing range of US$4,000-7,000 per sq meter, subject to location and product quality.

It said that new properties within this category have recorded stable absorption rates of over 75% across the past five years, according to Savills.

“There is an acute lack of supply of properties within this price range in this prime location, as most of the market supply has been in the ‘upper high-end’ category, with prices of >USD7,000 per sq meter.

As such, our product will be highly sought-after by high-income expatriate families and the growing local middle and high-income Vietnamese seeking value and proximity to the premium amenities nearby such as the British and American International Schools, private hospitals, sports and recreational clubs,” chairman of Gamuda Land Vietnam Operations,  Angus Liew said in a separate statement.

Gamuda said the acquisition aligns with it’s Quick-Turnaround-Projects (QTP) strategy, focusing on high-Internal Rate of Return assets with investment horizons of five years or less, complementing their expertise in township developments.

By capitalising on the limited residential supply in central districts and providing unique offerings to potential buyers, Gamuda aims to achieve profitable growth in Vietnam.

Gamuda said Vietnam’s economic prospects further bolster the rationale for the acquisition.

With an average growth rate of 6% per annum over the last two decades, the country is expected to remain one of the fastest-growing economies in the emerging and developing Asian region.

Ho Chi Minh City, in particular, attracts significant foreign direct investment and serves as a manufacturing and export hub.

The proposed acquisition holds promising prospects due to limited prime land sites in central districts, targeting the high-end market with stable absorption rates, excellent connectivity, and unique features like an unobstructed canal-frontage view and nearby amenities.

Gamuda will fund the proposed acquisition from a combination of internally generated funds (42%) and borrowings (58%).

With a gross development value of R5.1 billion, the roject is expected to contribute significantly to the earnings of the Gamuda Group over the next five years.

Gamuda shares rose by 2 sen or 0.45% to RM4.47 today, representing a market value of RM11.9 billion.