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Wednesday, July 2, 2008

Vietnam project set to boost BLand property division

An artist's impression of the Vietnam International University Township

HO CHI MINH CITY: Berjaya Land Bhd (BLand) expects its property segment to contribute up to 50% of total earnings in about four years.

This will be backed by its largest overseas project, the US$7.5bil Vietnam International University Township (VIUT).

Chief executive officer Datuk Francis Ng said the company’s largest contributor currently was its gaming sector while the property segment contributed less than 20% to total earnings.

BLand’s wholly-owned subsidiary Berjaya Leisure (Cayman) Ltd yesterday received the investment certificate from the licensing authority in Vietnam for VIUT, which is expected to be completed in eight to 10 years.

The project will be fully developed and managed by Berjaya VIUT Ltd, a newly-incorporated wholly-owned subsidiary of Berjaya Leisure (Cayman).

“With this project, we see enhanced earnings from property (operations),” Ng told reporters at the investment certificate award ceremony yesterday.

The project’s gross development cost was about US$5.9bil while its gross development value (GDV) stood at around US$7.5bil, he said.

“Four to five months ago, the expected cost was US$3.5bil but with escalating prices of materials and oil, we had to revise the figures”, he said, adding that further revision (of costs and GDV) was expected.

The entire project would be financed via internal funds, Ng said. “Initial capital cost will be minimal.”

As at April 30, BLand’s cash and cash equivalents stood at about RM687.5mil.

Ng said the company expected to receive approvals from the relevant authorities to start construction of VIUT in four to six weeks.

“Phase 1 should start in about three months,” he said, adding that there were seven phases in total.

Located in Hoc Man district, about 20km from downtown Ho Chi Minh City, the project sits on 925ha. Upon completion, the project will comprise, among other things, residential and commercial units, international universities, schools, gardens as well as sports and recreational centres.

The company expects the entire development to cater to more than 70,000 residents and 12,000 students.

By The Star (by Yvonne Tan)

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