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• SP Setia (Setia) yesterday announced that Binh Duong Province had issued an Investment Certificate to Setia Lai Thieu One Member Company. Construction of this development, nonetheless, will not begin until a construction permit has been granted. As mentioned previously, all necessary approvals should be obtained within 12 months.
• The JV company - between Setia and its local partner Becamex IDC Corp - was formed to undertake a proposed development - for a mixed-use project in Vietnam.
• Development is for a piece of land measuring 27 acres – located in Lai Thieu Town, Thuan An District within the Binh Duong Province. Land is located about 16km north of Ho Chi Minh City, less than an hour drive away from the Tan Son Nhat international airport.
• To be developed within six years, this 27-acre project – GDV of circa US$250mil – comprises 1700 units of shop houses, terrace houses, semi-detached houses, commercial centres, a clubhouse and apartments.
• We believe Setia will be able to garner stronger pricing given a more prime location – site of proposed development is much closer to Ho Chi Minh City compared to Setia Eco Lakes.
• We estimate that, based on an efficiency rate of 80% and a plot ratio of four times, the group would be able to garner a pricing of US$65-US$70psf for this development. We understand that Setia is getting around US$40psf for Setia Eco Lakes.
• We are cautious of the take-up rate given the slow moving rate of its maiden project in Setia Eco Lakes – although it is about 90% presently. We believe it would take a while for the group to penetrate the immature middle-class population.
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