This article first appeared in The Edge Malaysia Weekly on January 13, 2025 - January 19, 2025

GAMUDA Land, the property arm of Gamuda Bhd (KL:GAMUDA), is aggressively expanding its footprint in Vietnam, acquiring its eighth project there, this time in the Le Chan district of Hai Phong City, Vietnam’s third largest, just 1½ hours from Hanoi.

The 2.7-acre land, worth RM175.4 million, has an estimated gross development value (GDV) of RM1 billion, with plans for high-rise apartments.

The developer first ventured into the Vietnam property market via its 499-acre Gamuda City township in Hanoi in 2007, and later to Ho Chi Minh City (HCMC) in 2010, developing the 202-acre Celadon City. Its latest acquisition in Hai Phong City is its sixth quick turnaround project (QTP).

“Vietnam serves as a cornerstone of our regional expansion strategy. Projects such as Celadon City, Gamuda City and our five active QTPs highlight our ability to deliver vibrant, sustainable developments that integrate green spaces, modern infrastructure and community-focused designs. Our QTP strategy prioritises projects with a high internal rate of return, allowing us to generate returns within five years and reinvest into new ventures. We target projects with a GDV of at least RM1 billion as this ensures sustained growth and stability through a balanced approach that includes larger township developments,” Gamuda Land Vietnam chairman Angus Liew told a recent media briefing in HCMC.

The strategy enables sustainable global scaling, offers higher returns to shareholders and investors and diversifies geographical risks. Gamuda Land’s ultimate goal is to double its annual property sales globally within five years by focusing on high-yield QTP developments alongside its township projects.

Over the last three financial years, Gamuda Land has achieved record-breaking performances, with property sales for its financial year ended July 31, 2022 (FY2022) and FY2023 reaching RM4 billion and RM4.1 billion respectively. In FY2024, Gamuda Land recorded a new milestone of RM5 billion in sales, and record revenue and earnings of RM4.2 billion and RM411 million respectively.

With a population of 10 million, Savills Viet­nam deputy managing director Troy Griffiths says HCMC has a limited supply of new properties. In fact, only 799 new units in total made it to the market in 3Q2024. He says the government’s anti-corruption campaign has affected all industries including property, with fewer approvals for new projects resulting in high demand outweighing limited supply.

“The year 2025 is going to be an exciting one for Vietnam as things are primed to move on to the next stage. We are also seeing massive improvements in infrastructure here, and as long as these properties are in a good location, together with a good strategy and product offering, it will be great,” he says, adding that he expects the supply of new properties to improve by 2027 to 19,000 units per year.

The government has accelerated major transport infrastructure projects, and just prior to the media familiarisation trip, the city’s first metro line — a project that was 17 years in the making — opened a little over a week earlier on Dec 22.

Additionally, Griffiths believes the implementation of new real estate statutes including Land Law, Housing Law and Real Estate Business Law, will positively impact the property market, although the effects may take time to fully materialise. These developments are expected to stabilise the market and further support the upward price trend.

“As a major player in Vietnam’s thriving market, we remain optimistic about its prospects and are committed to creating long-term value in its booming real estate landscape. Moving forward, Vietnam will account for 60% of our international sales, driven by its robust economic growth and our deep local expertise. Gamuda Land has been transforming Vietnam’s real estate sector since operating here in 2007,” says Liew, highlighting the company’s strong foundation in the country supported by a dedicated local team, 90% of whom are Vietnamese.

“The country’s economic resilience with a projected gross domestic product growth rate of 6.5% to 7%, and a 13% increase in foreign direct investment in 2024 further enforces our confidence in this market,” he says.

The newly acquired site in the Le Chan district is about 2km from the central business district and close to Cat Bi International Airport. It will benefit from good infrastructure and close proximity to government agencies, malls, universities and hospitals, according to the developer.

The newly developed market has a total apartment stock of 13,087 units from five current projects and eight sold out projects as at 1H2024, mainly in the mid- to lower-mid-end segments. According to Gamuda Land, between 2019 and 2023, stock grew at a robust 28%, or 2,000 new units, per year. Among the six districts in Hai Phong, Le Chan accounted for the largest share of 5,542 units, or 42%, highlighting its potential as a key growth area.

The Hai Phong project is expected to be launched in FY2026 and completed by FY2028.

Apart from its Celadon City township in HCMC, which has since been fully sold and completed with a GDV of RM4.5 billion, Gamuda Land’s other projects there are Eaton Park, Artisan Park, The Meadow, Elysian and, more recently, the 45-acre Springville township. Springville has a GDV of RM1.8 billion, is situated close to the upcoming Long Thanh International Airport and is slated for launch later this year.

“Our landbanking strategy focuses on establishing a strong presence in key areas like Hanoi and Ho Chi Minh City. We maximise the potential of ‘borrowed landscapes’, leveraging nearby rivers, parks or lakes, and prioritising locations with existing or planned infrastructure, such as airports, highways and metro systems. Additionally, we pursue shovel-ready sites in prime locations with all requisite planning approvals, enabling us to swiftly deliver in-demand products to a market with supply shortages. Eaton Park is a prime example of this approach,” Liew says.

“Our flagship developments such as Gamuda City in Hanoi and Celadon City in Ho Chi Minh City have played a major role in shaping our local presence. Celadon City, in particular, remains one of the most iconic and best-planned townships in Ho Chi Minh City’s west side.”

The Celadon City township was one of the winners for Outstanding Overseas Project at The Edge Malaysia Property Excellence Awards in 2024 while Gamuda City won the same award in 2019.

Gamuda Land says the economic impact of its developments there has been significant. “In Celadon City, we have seen a surge in land prices. Prices have risen from RM494 psf in January 2016 to about RM660 psf today. Small plots have doubled in value due to the limited availability. Some properties within Celadon City were recently valued at RM1,320 psf, compared with the average RM418 in 2011 during its launch. This serves as a prime example of Gamuda Land’s commitment to sustainable master planning, community-centric living and world class amenities.”

Interestingly, Vietnam allows foreigners to own up to 30% of the apartments in a high-rise while for landed properties, 10% of the total number of units within a specific project are allocated for foreign ownership. These limits strike a balance between attracting foreign investment and maintaining local control over the property market. Foreigners are allowed to own residential properties for up to 50 years, with an option to extend the leasehold period.

Property development contributed 28.3% or RM4.185 billion and 45% or RM411 million to the group’s revenue and net profit respectively in FY2024. Its other core business is engineering and construction.

Apart from Malaysia and Vietnam, Gamuda Land also has projects in Australia and the UK. It received approval for its 75 London Wall project in London in mid-2024, to convert what was recently referred to as Winchester House and formerly the UK headquarters of Deutsche Bank into office spaces. The project, in partnership with UK-based real estate investors Castleforge Partners, will see 89% of the existing building, including existing façades on its lower levels, retained while the offices will be transformed into a sustainable Grade A+ office space. The groundbreaking for 75 London Wall will be held within the next few weeks, with an expected project completion by 3Q2027.

Gamuda Land plans to invest RM10.5 billion over the next five years worldwide, focusing on growth corridors such as Vietnam, Malaysia and the UK. By 2030, it expects a more balanced sales contribution of 40% from Malaysia, 45% from Vietnam and 15% from the UK, Australia and other regions.

In Malaysia, Gamuda Land’s ongoing projects include Gamuda Cove in Southern Klang Valley, twentyfive7 in Kota Kemuning, Gardens Park and Kundang Estates in Sungai Buloh, as well as Gamuda Gardens, in Selangor, and Horizon Hills in Johor.

Globally, Gamuda Land has 12 QTPs and RM6.9 billion in unbilled sales as at 1QFY2025 and, according to the developer, is well-positioned to achieve its target of RM8 billion sales by FY2027.

Over the last one year, Gamuda’s stock price has doubled to RM4.99 as at last Thursday, valuing the group at RM28.38 billion. The performance was driven by, among others, job wins for its engineering and construction segment — locally and abroad — as well as the stock’s inclusion into the FBM KLCI constituents list, effective Dec 23, 2024.

According to Bloomberg, 19 of the 21 ana­lysts covering Gamuda, have a “buy” call on its counter, with a 12-month consensus target price of RM5.45.

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