Singapore’s Keppel Corporation together with Keppel Vietnam Fund (consortium) has entered into binding agreements to acquire 49% interest in two adjacent residential projects of local real estate developer Khang Dien Group for an aggregate consideration of 3,180 billion Vietnamese dong ($138 million).
Khang Dien Group, which will hold 51% interest, will jointly develop these projects with the consortium. The Ho Chi Minh City Stock Exchange-listed real estate development company builds and manages townhouses, condominiums, villas and business parks.
The shareholding ratio between Keppel and Keppel Vietnam Fund (KVF), one of Keppel’s private funds, in the consortium is 50:50.
This transaction follows KVF entering into an agreement with the Vietnamese developer Phu Long Real Estate Corporation (Phu Long) to acquire a 49% stake in three residential land plots in Mailand Hanoi City for an aggregate consideration of 2,715 billion Vietnamese dong (around $119 million) in January last year.
The consortium and Khang Dien Group plan to jointly develop a total of more than 200 landed homes and more than 600 high-rise apartments on the two sites, which have a total land area of about 11.8 hectares in Thu Duc, Ho Chi Minh City.
The total development cost for the projects, inclusive of land cost, is expected to be around VND10,200 billion (approximately $444 million).
“This joint strategic acquisition with Keppel Vietnam Fund in Ho Chi Minh City is in line with Keppel’s asset-light business model under Vision 2030, and enables us to tap third-party funds for growth,” said Joseph Low, President (Vietnam), Real Estate Division, Keppel.
Singapore’s Keppel Corporation is tapping emerging markets like Vietnam for growth, with the country gaining traction as a manufacturing hub for investors seeking to diversify from China.
The company’s CEO Loh Chin Hua noted in an interview with Nikkei Asia that businesses have been leaning into a “China plus one” strategy — a bid to diversify investments from the mainland in favor of alternative destinations to reduce concentration risks.
Keppel has had a presence in Vietnam since the beginning of the country’s economic boom in the 1990s. Over three decades, Keppel has grown to become one of the largest foreign real estate investors in the country.
Keppel Vietnam Fund, launched by Keppel Group’s asset management arm Keppel Capital and Keppel Land in 2020, secured its first close of $400 million in December 2020. The fund has a target of $600 million. When fully leveraged and invested, the fund will potentially have assets under management of approximately $1 billion.
