Tuesday, July 1, 2008

Potential Lies In Building Townships

Source : The Business Times, July 1, 2008

KepLand's projects across the region will yield 54,500 housing units

TOWNSHIP developments in the region can offer large business potential. Tapping into this is Keppel Land, which currently has about 1,300 hectares of such projects across China, Vietnam, Indonesia and Malaysia. These developments are slated to yield 54,500 residential units on completion, and have been launched or planned for launch.

Mr Ang: Building our presence entails a longer term strategy

Phase one of a 34-hectare township development in Shenyang, China could be next in line for release in 2009.

According to Keppel Land International's executive director and chief executive officer Ang Wee Gee, the property developer continues to actively pursue deals in Shenyang. 'We might be able to announce some interesting deals in the near future,' he said.

Mr Ang observed that residential prices in Shenyang have increased by an average of 10 to 15 per cent per annum over the last several years and the trend is likely to continue. This is a healthy growth rate because it is driven less by speculation, and more by demand for homes for occupation, he pointed out.

Future looks bright: Artist's impression of Keppel Land's Shenyang township development

What of the outlook for property developments in Vietnam? Some analysts have been bearish over falling sale prices and expect developers to delay launches. Keppel Land currently has 431 hectares of township developments which have been launched or planned for launch in Vietnam.

Mr Ang said Keppel Land's deals are 'above water' - it acquired seven sites in Vietnam last year on projections of lower selling prices before the property market peaked. 'If these projects are presented to us today, we will still proceed to acquire them,' he said.

Mr Ang also said that Keppel Land's property launches in Vietnam will proceed according to plan.

He believes fundamentals remain strong in growing economies such as Vietnam and China, and factors such as rapid economic growth and urbanisation will continue to boost demand for housing.

There may be short-term market fluctuations but 'we want to build our presence and that entails a longer term strategy,' said Mr Ang.

Keppel Land shares closed at $4.96 yesterday, down 7 cents or 1.4 per cent.

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