Gamuda Land, the property arm of Malaysia’s Gamuda Berhad, will spend VND7.2 trillion ($315.8 million) to acquire 100% of equity in Vietnam’s Tam Luc Real Estate Corporation.
The firm announced Thursday that the transaction will see it acquire a 3.6-hectare project solely owned by the Vietnamese firm. The site, which will serve both commercial and residential purposes, is located in Ho Chi Minh City’s Thu Duc city.
In May, property services firm Cushman & Wakefield valued the project at $320 million, slightly higher than the purchase price. Construction permit for the project includes 1,968 exclusive apartments, 12 penthouses, 51 podium shops and 21 shophouses.
The acquisition was part of Gamuda Land’s quick-turnaround-project strategy, focusing on generating a continuous pipeline of high-internal rate of return assets within five years or less, the company said.
It noted that Vietnam continued to be a key market for Gamuda Land, given the country’s strong average economic growth rate of 6% per year in the last two decades and the prospect of it becoming one of fastest growing Asian economies.
Gamuda Land also highlighted the project’s prime location in Thu Duc city with strong connections to the central business district of HCMC. Thu Duc city accounts for 30% of HCMC’s gross regional domestic product (GRDP) and has a high urbanization rate of over 83%.
Gamuda Land has been operating in Vietnam since 2007, with its maiden project a township development - the 274-hectare Gamuda City in Hanoi. It expanded its presence with the Yen So Sewage Treatment Plant and Yen So Park, which transformed the area into a “thriving green lung.”
Gamuda Land debuted in the southern region with two projects: the 82-hectare Celadon City in HCMC and Artisan Park in the neighboring province of Binh Duong. The Artisan Park is Gamuda’s latest development in the country that will build 349 townhouses and shop-houses.
According to Gamuda’s report for the fiscal year 2022 ending July 31, 2022, the firm earned global revenues of RM6,435 million ($1.41 billion), up 28.3% year-on-year. Of this, the revenue from Vietnam quadrupled to RM1,255 million ($275.6 million), making it one of the firm’s biggest overseas markets, in addition to Australia, Singapore and Taiwan.
Non-current assets of Gamuda in Vietnam inched up 0.05% to RM507.2 million ($111.4 million) in the period.