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Keppel Land increases stake in Saigon Centre

Released at: 19:16, 20/03/2017

Keppel Land increases stake in Saigon Centre

Photo: Keppel Land

Additional 16% picked up from Vietnamese partner, the Southern Waterborne Transport Corporation.

by Ngoc Lan

Keppel Land, through its subsidiary Krystal Investments Pte Ltd, has acquired an additional 16 per cent stake in Keppel Land WATCO I to V, the joint venture entities for the Saigon Centre in Ho Chi Minh City, from its Vietnamese partner, the Southern Waterborne Transport Corporation.

The purchase is valued at VND845.9 billion ($38.45 million).

Following the acquisition, Keppel Land raises its aggregate interest in the joint venture companies for Saigon Centre Phases 1 and 2 (Keppel Land WATCO I, II and III) from approximately 45.3 per cent to 53.5 per cent, and its aggregate interest in the joint venture companies for subsequent phases of Saigon Centre (Keppel Land WATCO IV and V) from 68 per cent to 76.2 per cent.

The transaction is not expected to have any material impact on earnings per share and net tangible assets per share of the Keppel Corporation Limited for the current financial year.

“Vietnam is one of our key growth markets and continues to attract foreign direct investment that will drive positive demand in the property market from homes to offices and mixed-use developments,” said Mr. Ang Wee Gee, CEO of Keppel Land. “Our increased stake in Saigon Centre reflects Keppel Land’s confidence and long-term commitment to contributing to sustainable urbanization in Vietnam with our quality portfolio of properties.”

The Saigon Centre is located on a prime 2-ha site in the heart of the CBD in District 1 and is being developed in several phases. It is also within walking distance of two planned underground railway stations, at Ben Thanh Market and the Opera House.

The Saigon Centre retail mall is a part of the Phase 2 development. It was opened on August 1, 2016, with the Takashimaya Department Store as its anchor tenant, and has welcomed 6 million visitors since opening.

Phase 2 of Saigon Centre, designed by internationally-renowned New York-based architect NBBJ, will comprise 55,000 sq m of prime retail space, 44,000 sq m of premium Grade A office space, and 195 luxury serviced apartments when fully completed at the end of this year.

Phase 1, which was completed in 1996, comprises a 25-storey office tower that is leased to the diplomatic corps, multinational corporations, and banking and financial institutions. Tenants include DBS Bank, AIG, Reuters, and Mitsubishi Corporation.

In the second quarter of 2016, Keppel Land sold 70 per cent of charter capital in the Quang Ba Royal Park Joint Venture Company Ltd (QBRP), including Sedona Suites Hanoi in Tay Ho district, to the BRG Group Joint Stock Company for approximately $22.3 million.

Sedona Suites is located in a particularly favorable area near West Lake, with 155 apartments and 20 luxury villas. The M&A deal was conducted in line with KLL’s strategy of continually recycling assets for higher returns.

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