BT: Chip Eng Seng signs Vietnam deals

Business Times - 03 Jan 2008

Chip Eng Seng signs Vietnam deals

Property group in joint deals to develop two residential projects
By CHEW XIANG

CONSTRUCTION and property group Chip Eng Seng has signed separate agreements to develop two residential projects in Vietnam.

The first is a 20 per cent stake in a business co-operation deal with two local partners there to build a 782-unit condominium in Ho Chi Minh City's District 8. The total development cost is estimated at $90 million, Chip Eng Seng said in a statement.

The local partners are Vinh Tien Joint Stock Company and Hoa Binh House Joint Stock Company, which will hold 41 per cent and 39 per cent of the project respectively.

The second deal is for a 25 per cent stake in Viet Investment Link Joint Stock Company (VL).

Chip Eng Seng and VL are talking with another local partner to develop a condominium on a 7,000-square-metre site in Ho Chi Minh City's District 2.

Related link:
Click here for Chip Eng Seng's press release

Chip Eng Seng said that its stake in VL will rise to 49 per cent this year. The total development cost is estimated at $90 million.

Both projects should be launched in the second half of the year, and Chip Eng Seng said that it will also provide project management and consultancy services for both.

The investments, each held through a wholly owned subsidiary, is expected to contribute positively to its net tangible assets and earnings per share for its current financial year.

The deals are its first in the country since it took a 5 per cent stake in a listed Vietnamese construction company, Hoa Binh Construction & Real Estate Corporation, last July. The tie-up has brought 'good equity returns and excellent business opportunities', Chip Eng Seng said.

The company is setting up an office in Ho Chi Minh and is considering investments in hotels and commercial and retail properties in the country.

Chief executive officer Raymond Chia said in a statement: 'The Vietnam market is roaring with potential. Our investment in this market is taken with a long-term view. I see Chip Eng Seng becoming one of the key foreign investors in Vietnam.'

The company plans to expand extensively through the region, Mr Chia said. It is also looking for opportunities in Bangkok, Kuala Lumpur and China.

'In three years, I am looking to have 30 per cent of our revenue and profit coming from the overseas market,' Mr Chia added.