Qatari fund respanortedly acquiring Vietnam’s tallest building at $800mn

A Qatari sovereign wealth fund will likely become the new owner of the tallest building in Vietnam in a US$800 million deal, a South Korean newspaper reported Thursday.

The Qatar Investment Authority has accepted the $800 million price set for the acquisition of the Keangnam Landmark 72 tower in Hanoi, according to English-language website The Korea Herald, which cited “investment bankers and news reports.”

The South Korean newspaper said the Qatar Investment Authority has also “gained exclusive rights for the ensuing negotiations.”

The Doha-based company, which specializes in domestic and foreign investment, is one of the two interested investors, besides Goldman Sachs, that have publicized their plans to acquire the 72-story building.

The Qatari firm has notified Colliers International, the New York-based real estate consultancy managing the skyscraper sale, that it will accept the $800 million appraisal price granted by a South Korean court, according to The Korea Herald.

The company initially offered $600 million but eventually decided to raise the price in accordance with the ruling.

Previous South Korean media reports said the court valued the Hanoi building at 830 billion won, or $770 million.

Keangnam Landmark 72, fully known as the Keangnam Hanoi Landmark Tower, was developed by Seoul-based Keangnam Enterprises, which is in troubled waters at home over corruption scandals, at a cost of $1.05 billion.

The complex, consisting of one 72-story office tower with a height of 350 meters and two 48-story residence towers, opened in October 2011.

Keangnam Enterprises still owes bank loans totaling 530 billion won ($48.62 million), according to South Korean media.

The Korea Herald said the creditors of the building, including five banks and ten savings banks in South Korea, have also reportedly agreed to open negotiations no later than July.

A successful talk means the Qatari firm will become the preferred bidder, a shortcut to acquisition, according to the newspaper.

Former head of Keangnam Enterprises Sung Wan-jong killed himself in mid-April over a corruption scandal involving many top South Korean politicians.

Keangnam Vina, which operates the Hanoi skyscraper, was involved in window dressing of the accounting books to hide mounting debts during its construction, according to The Korea Economic Daily.

A Keangnam Vina representative told Vietnamese newswire VnExpress on Thursday the sale of the Keangnam Landmark 72 tower does not have anything to do with its two 48-story residence towers, whose apartments have already found buyers.

These flat owners have recently lodged a complaint to Prime Minister Nguyen Tan Dung, expressing their concern that a maintenance fund worth VND160 billion ($7.46 million) would go with the skyscraper’s owner once it is acquired by a new investor.

Every apartment owner was required to pay a fee worth two percent of the purchase contract value to make up the fund, which is meant for maintenance work on the whole building.

Keangnam Enterprises is supposed to transfer the fund to the administrative board once the building is acquired by a new owner, something the flat owners are worried will not happen as the South Korean firm is on the brink of bankruptcy.

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Qatari fund respanortedly acquiring Vietnam’s tallest building at $800mn

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