Devaluation of Vietnam dong will not affect ventures, SP Setia says

KUALA LUMPUR: Property developer SP Setia Bhd Group believes that the recent devaluation of Vietnam’s currency will not affect its development ventures there.

SP Setia president and chief executive Tan Sri Liew Kee Sin told theedgeproperty.com that the short-term volatility of the Vietnamese dong is not a major concern to the developer as its presence there is for the long-term.

Nevertheless, the company welcomes the positive efforts by the Vietnamese government towards sustainable long-term growth, Liew said.

“We are still very excited about the long-term prospects of the country and its property sector. Any effort by the Vietnamese government and its central bank to strengthen the fundamentals of the economy will be positive in helping the country achieve sustainable long-term growth, which should be lauded,” he added.

The Vietnam central bank deputy governor Nguyen Van Binh said on Dec 2 that the bank is ready to carry a “very big-scale” intervention to stabilise the beleaguered dong, backed by foreign exchange reserves of more than US$16 billion (RM53.92 billion).

According to data from Bloomberg, the dong was quoted at 18,482 per dollar, a 13.6% increase during an 18-month period, from 16,267 per dollar on June 4 last year.

SP Setia made its first foray into Vietnam in mid-2007 when it collaborated with Vietnam’s state-owned conglomerate, Investment and Industrial Development Corporation (Becamex IDC Corp), to develop its maiden project – the US$620-million EcoLakes – at MyPhuoc Industrial Park, 42 km north of Ho Chi Minh City.

It officially launched Phase 1 – the Garden of Splendor – in March this year. The project, with a gross development value (GDV) of US$20 million for 251 units of terraced houses, has seen an impressive take-up rate of 90%. The construction of Phase 1 has already begun and is scheduled for completion by the end of next year.

Phase 2 – The Valley of Dreams – comprising 58 units of semi-detached houses and villas, was launched in September this year, and has a GDV of US$11 million.

SP Setia’s next development called EcoXanh is a joint-venture with state-owned enterprise Saigon High Tech Park Development Company, at Saigon Hi-Tech Park in District 9 of Ho Chi Minh City. This 79-acre project is still in the planning stages.

In October this year, SP Setia subsidiary Setia Lai Thieu Ltd signed an agreement with Becamex IDC Corp for the assignment of a 27-acre land in Lai Thieu Town, Tuan An District, Binh Doung Province, Vietnam to develop a mixed-use project with a GDV of US$250 million.

The developer will construct shop houses, terraced houses, semi-detached houses, commercial centres, club house and apartments, which are expected to take six years to be completed.