BLand to develop Vietnam township

BERJAYA Land Bhd, a unit of Berjaya Corp Bhd, will develop a 405ha site in Hanoi, Vietnam into a new township with a potential gross development value (GDV) of some RM8 billion over 10-12 years.

This would swell BLand's expected GDV from five projects in Hanoi and Ho Chi Minh City including the latest venture, to some RM40 billion, BCorp chairman and chief executive officer Tan Sri Vincent Tan said.

Tan said overseas projects would contribute significantly to BLand's revenue and profit from 2010 or 2011, with Vietnam potentially generating more earnings than its Malaysian operations over the period.

"Together with the other (four) properties that the group are acquiring in Vietnam announced earlier, we would have a total of 1,334ha which when developed has a potential GDV in excess of US$10 billion (RM33.2 billion)," Tan told Malaysian reporters in Hanoi yesterday.

"These acquisitions demonstrate our belief in the long-term growth of the Vietnam economy. The strong GDP (gross domestic product) growth of an average seven per cent for the past decade and the phenomenal increase in foreign direct investment in recent years say much about this country," he added.

Additionally, BLand - which also has businesses or projects in countries like Thailand, South Korea and China, has bought two five-star hotels in Hanoi from Malaysian businessmen and expects to seal another major project in the capital by year-end.

BLand yesterday signed a deal with state-owned Hanoi Electronics Corp to jointly develop the 405ha in Long Bien district into a mixed residential, commercial and industrial township through a 70:30 joint venture company called Berjaya-Hanel Co Ltd.

Tan said the company expects to obtain an investment licence to kickstart construction of the project within three to four months.

BLand will pump in some RM700 million into Berjaya-Hanel as its paid-up capital, while its partner should come up with some RM300 million.

BLand, in an announcement to Bursa Malaysia yesterday, said the project should cost around RM4.4 billion to develop. It will boast residentials like townhouses,villas and low and high rise apartments, as well as schools, shop offices, business and industrial parks,shopping mall, medical and sports centres.

Meanwhile, Tan reiterated that funding for its Vietnamese projects could potentially come from sales of more BLand irredeemable cumulative unsecured loan stocks (ICULs) and matured assets in Malaysia.

He noted that BLand still has about 600 million ICULs that can be sold if need be, to complement the previous sales that had generated RM570 million which were partly used to pay for its earlier investments in Vietnam.

By New Straits Times (by Zuraimi Abdullah)