PETALING JAYA: Gamuda Land Sdn Bhd, a unit of Gamuda Bhd, has made its maiden foray into Vietnam with a proposed 800-acre fully integrated commercial development project.
Construction of the project, valued at US$1bil, is due to start by the end of the year and would take “no longer than eight years” to complete. It would comprise, among others, a convention centre, office towers, international five-star hotels and luxury properties.
“We are looking at developing the project, known as Yenso Park, in Hanoi city into a commercial urban centre,'' Gamuda Land general manager (business development) John Yong told StarBiz yesterday. “It is not going to be just a residential township development.''
“In Vietnam, foreigners are not allowed to own land. So we are going into the project as a joint-venture partner with funds and expertise to redevelop the area,” he said.
Yong said Gamuda had an 80% stake in the venture. The balance is held by state-owned Mechanical Engineering Services LLC, which owns the land.
“The development will be complemented with a 250-acre botanic park, and positioned beside a 325-acre lake system,” he said.
He said Gamuda would improve the lake, currently used as a retention pond for floodwaters.
“So, it needs to be upgraded and improved. We won't pay for the land; in exchange for doing all the improvement and upgrading, we will be allowed to develop the land,” he added.
Gamuda would then generate income from the sale of its development to supplement the cost of the infrastructure upgrading, Yong said, adding that to kick start things, improvements to the lake as well as the park would be done.
“We will then tie this in with the rest of the housing and commercial developments. We are still in the early stages of planning the whole thing, but we will be looking at no longer than eight years to complete the entire project.
“It depends on demand but eight years is the period we are very comfortable with,” Yong said.
On the commercial development, Yong said the company would seek suitable partners, such as international hotel operators and retailers, over the next few years.
“The payback for hotels is very fast, if done successfully. As far as residential properties in Vietnam are concerned, payments are very front-loaded, hence the risk to the developer is minimal,'' he said. “The demand in Vietnam is so great that there is always a shortage of quality development there.”
The growth of Vietnam's economy was robust and it offered tremendous opportunities, he said.
“For example, the amount of foreign direct investment there is unprecedented,'' Yong said. “So, we are very excited and confident of the prospect the project offers.”
He said also the company was in discussions on a few more projects in Vietnam, including one of a similar scale as the Yenso project.