Home Real Estate The Conquest of the Coast: Gamuda Land’s New Venture in Hai Phong

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The Conquest of the Coast: Gamuda Land’s New Venture in Hai Phong

6 February, 2025

“Gamuda Land’s Strategic Focus: Optimizing Vietnam’s Real Estate Boom”

According to Angus Liew, Vietnam remains pivotal to this property developer’s expansion strategy, given the robust housing demand in the country.

“As a key player in this burgeoning market, we remain optimistic about Vietnam’s prospects and are committed to creating long-term value amidst the nation’s thriving real estate landscape,” asserts Liew. Vietnam’s population is triple that of Malaysia, with over 100 million people compared to Malaysia’s 34 million.

“However, the housing supply in Vietnam is only half that of Malaysia,” Liew told reporters at the Eaton Park sales gallery in Thu Duc, Ho Chi Minh City, as quoted by The Star.

The limited supply of new homes in recent years is mainly attributed to the government’s tighter measures, which caused delays in approving new development projects. In 2024, Ho Chi Minh City saw around five new condominium projects launched, with Gamuda accounting for 1,200 units.

Liew observed that the Vietnamese real estate market, particularly in major cities like Hanoi and Ho Chi Minh City, has shown notable signs of recovery after a period of stagnation. For instance, apartment prices in Ho Chi Minh City increased by 5-10% in 2024, driven by high demand and limited supply, as well as improved market conditions.

Looking ahead, Gamuda Land foresees a positive impact on the real estate market from the implementation of new laws such as the Land Law, Housing Law, and Business Law, although it may take time to see tangible effects. These developments are expected to stabilize the market and further support the upward trend in prices.

Liew added that while property prices are rising in Vietnam, the situation is unlikely to escalate as in China, where the real estate market remains in a slump.

“In China, although an apartment may be sold out, the occupancy rate is low. It’s a speculative investment. In contrast, in Ho Chi Minh City, once a project is handed over, the occupancy rate reaches almost 100% within a year. This reflects genuine demand, which is not the case in China,” he remarked.

Gamuda Land Vietnam Chairman Angus Liew

In the past three financial years, Gamuda Land has achieved record-high annual sales and is on track to meet its sales target of RM 12 billion for the financial year ending July 31, 2028 (FY28). In FY2024, Gamuda Land attained a gross development value (GDV) of RM 2.3 billion.

“FY2022 concluded with RM 4 billion in property sales, followed by RM 4.1 billion in FY2023. By 2025, we had achieved a sales milestone of RM 5 billion; record revenue and income of RM 4.2 billion and RM 411 million, respectively. This accounts for 28% of the Group’s revenue and 45% of the Group’s income,” Liew informed.

“Our strategic focus is on doing business in familiar, urban areas with quick-turn projects (QTPs). We forecast a 30% profit growth in FY2027 (compared to FY2024) due to our current acquired projects, which are expected to contribute 90% of our profits in this period,” he added.

Gamuda Land’s strategy prioritizes projects with high internal rates of return, enabling the group to generate profits within five years and reinvest in new projects. This approach complements the company’s township development model by focusing on projects with a GDV of at least RM 1 billion.

This ensures substantial value creation while significantly reducing the payback period compared to the typically longer duration of 10-20 years for township development projects, which include infrastructure and landscape development investments.

Overall, Gamuda Land has 12 QTPs across Vietnam (6 projects), the UK (4 projects), and Australia (2 projects), with unbilled sales of RM 6.9 billion as of the first quarter of FY2025.

Since entering the Vietnamese market in 2007, the company has achieved a total investment of RM 18 billion, including infrastructure and real estate development projects.

Going forward, Vietnam will continue to account for 60% of Gamuda Land’s international sales, driven by the country’s robust economic growth.

Following the success of Eaton Park in Thu Duc, Ho Chi Minh City, the company is building on this momentum with other prominent projects. Located in Binh Chanh District, the second phase of The Meadow is expected to launch between February and April this year. Phase 1 was completely sold out. Additionally, Springville is anticipated to be launched this year. Located near the Long Thanh International Airport, it spans 18.3 hectares and comprises 2,000 apartments, with a GDV of RM 1.8 billion.

Liew also disclosed a project with a GDV of RM 1 billion located in Le Chan District, Hai Phong City, 1.5 hours from Hanoi and 2 kilometers from Hai Phong’s central business district, and in close proximity to Cat Bi International Airport. “With limited future supply in the heart of Hai Phong, Le Chan District, and minimal competition from new development projects,” Liew noted.

Most of Gamuda Land’s projects in Vietnam are of Grade A and B standards, targeting the mid to high-end segments. Liew assessed that while the top 10% of Vietnam’s ultra-wealthy population constitutes a small proportion, they still represent a significant market of approximately 10 million people. “Ho Chi Minh City and Hanoi remain the preferred locations for this elite group to invest their assets,” he shared.

“We maximize the potential of ‘borrowed scenery,’ leveraging nearby rivers, parks, or lakes, and prioritize locations with existing or planned infrastructure, such as airports, highways, and metro systems,” Liew explained.

By 2030, the company aims to achieve a sales contribution of 40% from Malaysia, 45% from Vietnam, and 15% from the UK, Australia, and other regions.