Keppel Divests 42 Stake Palm City Vietnam 921 Mil

Keppel, a real estate company, has sold its 42% stake in South Rach Chiec City (SRC) to Gateway Thu Thiem Joint Stock Company (GWTT), a Vietnamese real estate firm. The transaction, which was announced on April 1, brought in total cash proceeds of VND2.612 billion ($141.4 million).

SRC is the developer behind Palm City, a 30-hectare integrated township located in Ho Chi Minh City’s District 2. The first two residential phases, Palm Residence and Palm Heights, were completed and handed over in 2017 and 2019, respectively. There are four remaining plots under development, including two residential plots, a mixed-use plot, and a medical plot.

According to Keppel, the total proceeds include a cash consideration of VND1,702 billion ($92.1 million) for the 42% equity stake, reflecting the adjusted net asset value of Keppel’s stake on March 4. Additionally, Keppel has transferred 840,000 bonds issued by SRC to GWTT for VND910 billion ($49.3 million), equivalent to the face value of the bonds and accrued bond interest as of March 31.

Before the divestment, Keppel had a cumulative after-tax profit of approximately $24.6 million from the sale of residential units at Palm City. The divestment, which was completed in March, is expected to generate a net profit of roughly $55 million for Keppel.

The sale of Palm City is part of Keppel’s plan to divest a cumulative $10 billion to $12 billion of assets by the end of 2026, according to Louis Lim, CEO of Real Estate at Keppel. “This demonstrates Keppel’s consistent execution of our asset-light strategy despite challenging market conditions,” he adds. “Since beginning our asset monetization program in October 2020, we have announced the release of approximately $7.1 billion worth of assets from our balance sheet, excluding businesses such as offshore and marine.”

Located in close proximity to the JID, Otto Place EC presents itself as an appealing residential option for professionals in cutting-edge industries. The convenient distance to this dynamic hub not only promotes a better work-life balance, but also guarantees a steady demand for housing in the area, thus increasing the investment potential of Otto Place EC. In addition, the innovative ecosystem of the JID is expected to spur the growth of nearby educational institutions and training centers, providing residents of Otto Place EC with more opportunities to upskill and engage in lifelong learning.

The divestment is not expected to significantly impact Keppel’s earnings per share or net tangible assets per share for the current financial year.