Establishing foothold in Vietnam


IREKA Corp Bhd is entering Vietnam in a big way, albeit not directly, but through a property fund called Aseana Properties Ltd (ASPL) in which it has a 20% interest.

With US$250mil, ASPL that was recently listed on the London Stock Exchange, will help to realise Ireka’s ambition of establishing a foothold in Vietnam.

Ireka executive director Lai Voon Hon said the group, through ASPL, would tap the emerging Vietnam market where there were plans to develop Grade A offices, a five-star hotel and a condominium in Ho Chi Minh City’s central business district. There are also plans to do projects in Hanoi.

“We hope to bring our i-Zen brand name to Vietnam. A lot of foreign companies are setting up offices there, but there are not enough Grade A offices.”

“There are only about 300,000 sq ft of Grade A office space for a city of 8 million people. The rental rate is close to US$36 to US$38 per sq metre and rentals are collected a year in advance with three to six months tenants’ waiting list. We see tremendous opportunities,” he said, adding that foreign direct investments in Vietnam totalled US$10bil last year.

Ireka, which came to Mont’Kiara only in 1994, has established its reputation as a “bold and innovative” developer. For example, it has aggressively marketed its Tiffany by i-Zen high-end condominium as the preferred home for celebrities.

It will still be a force to be reckoned with in its Mont’Kiara bastion where it has six projects with a total of 2,000 residential units. They are Kiara 2 (238 units), Kiara 1 (304 units), Tiffani by i-Zen (399 units), Kiara View (404 units), Villa Aseania (48 units) and the soon-to-be-launched Seni Mont’ Kiara (606 units).

Ireka is believed to be the second largest developer after Sunrise Bhd in the affluent Mont’Kiara condominium enclave in Kuala Lumpur.

Its Mont’Kiara projects have done well and it has successfully built up its i-Zen brand.

Its One Mont’Kiara has almost been sold out although it has not been officially launched. Ireka Land Sdn Bhd has teamed up with Capital Land to develop One Mont’Kiara that will have 250,000 sq ft of specialised retail mall with lifestyle outlets and exclusive boutique office suites by award-wining architecture and interior design firms.

It will also have landscaped roof garden, cascading water features, infinity-edge swimming pool and fitness centre/spa. There will also be high-speed information and communications technology infrastructure with wireless connectivity, 24-hour concierge services and chill-out space on every floor.

The 176 units of office suites in a high rise block (832 to 8,000 sq ft) will be priced at an average RM530 per sq ft (psf) while the 250,000-sq ft retail space and 200,000-sq ft office block (both net lettable areas) will be for lease only, thus providing ASPL with recurrent income.

Ireka executive director Lai Voon Hon is confident that the offices could fetch a rental of about RM3.80 psf while the retail rate could be RM4.50 psf or more.

Its Kiara 1 condominium, launched two years ago is about 85% sold, and Lai is confident of selling the remaining units in view of the strong demand from young professionals who like to live in Mont’Kiara because of its many amenities and good security.

He said Kiara 1’s initial average prices were RM380 to RM400 psf but its balanced units were now priced around RM500 psf.

“Our Kiara 2 units have gone up in price. A one-bedroom 765-sq ft unit was transacted at RM555 psf in the secondary market and it could fetch RM4,500 a month in rental or a 15% yield,” he said. Its Tiffany condominium launched last July has also achieved 80% sales.

Ireka has also hived off its loss-making Westin Hotel and, with ASPL as its “cash cow”, it can also provide a steady income stream for its loss-making construction arm.

“We’ve started to restructure our construction unit so that it can be less dependent on public sector projects. We have to globalise,” said Lai.

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