International Finance Corporation (IFC) is subscribing to a 1.7-trillion-dong ($75-million) bond issuance by Vietnamese property developer Phu My Hung to help the latter expand housing projects to secondary provinces in Vietnam.
The proceeds will be primarily used to develop an integrated township in northern rural Hoa Binh province over the next 15-20 years, IFC said in a statement.
Upon completion, the project, Phu Hung Khang, will comprise of over 1,000 new homes, two schools, and a hospital. A 75-room hotel will also be built to tap into the area’s tourism potential.
“With this investment, we are now well-positioned to focus on developing new integrated townships in a number of secondary provinces, starting with Phu Hung Khang township, as part of a sustainable growth model,” said Phu My Hung CEO Gary Tseng.
Phu My Hung is the developer of an urban township located in District 7 of Ho Chi Minh City, which is described as a “sustainable city”, and can be replicated in other parts of Vietnam.
“Longer term, we see this as an opportunity to develop a strategic relationship with IFC to set higher market standards as the Vietnamese real estate sector continues to evolve,” added Tseng.
“This investment will deliver quality and climate-friendly accommodation to people working in and around Hanoi, thus easing the pressure on the fast-growing capital, and provide jobs and income for local communities,” said Kyle Kelhofer, IFC country manager for Vietnam, Cambodia and Laos, on closing the deal the World Bank Group member proposed in March this year.
Prior to this investment, IFC has extended an $87.5-million loan package for BIM Land to support the Hanoi-headquartered company in its hospitality projects in Vietnam and Laos.