Keppel Land, the property arm of Singapore- listed conglomerate Keppel Corp, is “one of the pioneer real estate developers in Vietnam”, having had a presence in the country since the early 1990s, says Linson Lim, Keppel Land’s president for Vietnam.

Keppel Land has 20 projects in the country with a total capital of US$2 billion ($1.8 billion) and a pipeline of more than 25,000 homes. Its diverse portfolio of properties — from Grade-A offices and retail centres, to waterfront homes, serviced residences and integrated townships — are located in Hanoi, Ho Chi Minh City, Dong Nai and Vung Tau.

“We are committed to strengthening our presence in Vietnam, with a focus on Ho Chi Minh City,” says Lim.

‘First-mover advantage’

In March, Keppel Land announced it had acquired an additional 16% stake from its joint venture partner for Saigon Centre, Vietnamese company Southern Waterfront Transport Corp. Keppel Land paid $53.5 million for the stake, which increased its aggregate interest in the JV companies for Saigon Centre Phase One and Two to 53.5%, from 45.3%. It also increased its stake in the subsequent phases of Saigon Centre from 68% to 76.2%.

Saigon Centre is located on a prime 2ha site in the CBD of Ho Chi Minh City

“Leveraging our first-mover advantage in Vietnam, we are deepening our presence in this growth market, with an increased stake in the Saigon Centre development in Ho Chi Minh City,” says Loh Chin Hua, CEO of Keppel Corp, in the group’s 1Q2017 results announcement.

Located on a prime 2ha site in the heart of the CBD, Saigon Centre is being developed in several phases. Phase One, a 25-storey mixeduse development that includes three floors of retail, office space and 89 serviced apartments, was completed in 1996. The office tower is fully leased; tenants include AIG, DBS Bank, Mitsubishi Corp and Reuters. The shopping mall, which opened last August, is also fully leased. It is anchored by Takashimaya Department Store.

Phase Two of Saigon Centre is scheduled for completion by year-end. Also a mixed-use development, it has 44,000 sq m of Grade A office space, 55,000 sq m of retail space and 195 luxury serviced apartment units.

Riding on the rising demand for shared workspaces globally, Keppel Land will also be introducing a co-working space in Phase 2 of Saigon Centre.

Strong project sales

In 1Q2017, Keppel Land sold 980 homes totalling $530 million, 4% higher y-o-y. Of the total, 110 were in Vietnam. Last year, it sold more than 1,500 homes in Vietnam, 63% jump from the 930 units sold in 2015.

Lim: Vietnam’s property market offers long-term growth potential and opportunities for investors

Keppel Land is also developing Empire City on a prime 14.6ha waterfront site in the upand- coming Thu Thiem New Urban Area in Ho Chi Minh City. Empire City comprises residential apartments, and retail and office components, and is integrated with an 86-storey, mixed-use tower.

Phase One of Empire City, the high-end apartment tower Linden Residences, was launched in December 2016. By end-2016, 82% of the 510 units in the project had been sold.

At its 872-unit Estella Heights in Ho Chi Minh City District 2, Keppel Land introduced a wide range of amenities in Phase 2 — Signature Collection. They include a clubhouse, private entertainment lounge, sky gardens and a lazy pool for children, a first in the city. Homebuyers also have access to a sky gymnasium, sky lounge and personalised concierge services.

The 872-unit Estella Heights is located in Ho Chi Minh City’s District 2

Last year, Keppel Land launched Palm City, a 30ha integrated waterfront township development located by the Giong Ong To and Muong Kinh Rivers. Located in District 2, it is a 15-minute drive from the CBD. Palm City will be developed in phases. When completed, it will have about 5,000 apartments, as well as retail, commercial, educational and medical facilities. The township will also house The American School’s new expanded campus.

Palm Residences — the first phase of Palm City — comprises 135 landed homes, with a mix of terraced and semi-detached houses. All the houses were snapped up at a private preview over one weekend in July 2016.

Following that success, Keppel Land and its partners launched the 816-unit Palm Heights to prospective homebuyers in October 2016. As at end-2016, more than 82% of the homes had been sold at an average price of VND32.7 million psm, or about $2,000 psm.

The 816-unit Palm Heights was launched in October 2016

Besides District 2, another sought after residential area in Ho Chi Minh City is District 7, owing to its proximity to international schools such as Canadian International School, Saigon South International School and Singapore International School. Keppel Land has a 2,400- unit project in District 7 called Riviera Point. The project, which will have a 500m frontage of the Ca Cam River, will be the tallest condominium in District 7 when completed. Phases 1A and 1B with a total of 894 units were launched last year, and 698 units (78%) had been sold as at end-1Q2017.

Phase 1A and 1B of Riviera Point were launched last year and 78% had been sold as at end-1Q2017

Weathering economic upheavals

Having been in Vietnam for more than two decades, Keppel Land has weathered many of the country’s economic upheavals. During the global financial crisis, Vietnam’s exports plunged in 2008 and 2009. Foreign direct investment inflows also slowed considerably, resulting in project delays and cancellations. Unemployment soared. Therefore, in 2008, Keppel Land therefore introduced an innovative “flexible payment scheme” for its homebuyers in Vietnam. Under the scheme, homebuyers needed to pay only a 50% down payment, and were able to move into their new homes. The balance 50% could be paid progressively over the next few years, without interest. Aimed at aspiring homebuyers, the scheme was the first of its kind in Vietnam, and was “very well-received”, recounts Lim.

Since the global financial crisis, the government of Vietnam has taken active steps to strengthen the economy and support enterprise growth, observes Lim.

“With the relaxation of the foreign homeownership policies, coupled with the government’s pro-business and pro-investment policies, Vietnam’s property market offers long-term growth potential and opportunities for investors,” adds Lim. “This, in turn, will have a positive impact on all sectors of the property market — from homes and offices to retail.”

With an estimated 47% of the current population of more than 95.2 million expected to live in cities by 2020, Lim is confident of the country’s long-term potential growth. “The city’s high urbanisation rate and improving infrastructure also support the demand for housing,” he adds.

This article appeared in The Edge Property Pullout, Issue 778 (May 8, 2017) of The Edge Singapore.