Rowsley Limited and Hoang Anh Gia Lai Joint Stock Company said the firms have mutually agreed not to proceed with the proposed joint venture regarding HAGL Myanmar Centre in Yangon.
Singaporean real estate developer, architectural and engineering consultancy firm Rowsley in February said it will invest $275 million for a 50 percent stake in a company that wholly owns HAGL Myanmar Centre, one of the country’s largest integrated projects with four office blocks, a five-star hotel, a retail mall, serviced apartments and residential apartments.
Rowsley, which is partly owned by billionaire Peter Lim, said an agreement could not be reached “over the details of the investment structure.”
According to Vietnamese media reports, HAGL said it declined Rowsley’s offer of direct investment in HAGL Myanmar unit due to high cost to transfer capital.
“The Singaporean company wants a direct investment in Myanmar in order to reduce risks,” HAGL’s acting general director Vo Truong Son said. “They hope to take account risks only in Myanmar instead of including risks in Viet Nam while executing the investment.”
HAGL added that it will find other potential partners for investment in Yangon complex.
Son said the firm was in talks with a number of foreign real estate companies, including firms in Hong Kong and Singapore, but declined to disclose more information as the negotiations are still going on.
“HAG’s partner must have strong financial capacity and share the same development vision with the company in operation and management of the complex, including pricing, marketing and product development strategies,” Son told Vietnamese media.
According to Son, the breakdown of the contract between the two companies will not have negative impacts on the complex’s development in Myanmar. The office building and hotel are still slated to open this June, while the shopping centre will likely open in September.
Spread over more than 73,000 square metres (sqm) in Yankin township and next to Inya Lake in Yangon, HAGL Myanmar Centre has a land lease term of 50 years plus an option for another 20 years.
It will have a total net gross floor area of almost 640,000 sqm when fully completed in 2018, comprising both commercial and residential components.
The first phase of the development includes two office tower blocks with a net area of about 81,000 sqm, a retail mall of about 39,000 sqm and a 400-room five-star hotel.
Construction of the first phase started about two years ago and the second phase, comprising another two office blocks with net area of about 94,000 sqm, and more than 1,000 service and residential apartment units, is expected to start in early 2016.