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Real Estate Business: Large Land Fund Will Win

business real estate

Although the southern real estate market is expected to face some difficulties in the near future, with many real estate businesses having a real capacity, this is still the new stage opening up many development opportunities.

The numbers that say

At the recent shareholder meeting of many real estate companies in Ho Chi Minh City, businesses not only cooled down their shareholders by announcing impressive business figures in the past year but above all, it is a belief in ambitious new business strategies.

At Thu Duc Housing Development Corporation (TDH) held last week, for the first time since its inception, TDH has recorded revenue of more than USD $ 43million.

real estate business
Project Lakeview City, District 2, Ho Chi Minh City of Novaland

Nguyen Vu Bao Hoang, General Director of TDH, said that in the fiscal year 2016, the company achieved an after-tax profit of USD $ 470 million, more than 2.35 times compared to 2015 and 35% of the plan. With the above-mentioned business results, in 2016, TDH will pay cash dividend at the rate of 10%. This year, TDH has set a consolidated revenue target of USD $ 590 million (Up to 28.5% compared to 2016), after tax profit of USD $ 5.6 million, up 20.16% and pay an expected 10% dividend.

With Novaland Group (NVL), at the press conference ahead of the upcoming AGM, NVL has announced the number of business results for 2016 and the 2017 plan is impressive.

Accordingly, NVL has sold more than 8,000 products in the year 2016, up 13.3% compared to sales in 2015, accounting for 23% of total consumption in Ho Chi Minh City, turnover reached USD $ 320 million and profit after tax was USD $ 72 million. Total assets of the Group by the end of 2016 reached a record USD $ 1.6 billion, up to 37.5% over 2015.

real estate business
Dream House is implementing the D-Vela project and actively acquires many other projects

In 2010, NVL targets revenue of USD $ 762 million and the net profit of USD $ 136 million. In the first quarter of 2017, NVL recorded net sales of USD $ 83 million, expected net profit of USD $ 18 million, up 164% over the same period last year.

Among the real estate business is the breakthrough in business, notably the Dream House Investment Corporation (DRH). More than a year ago, mentioning the name DRH, the real estate and finance business only known it is a secondary brokerage business and fertilizer business is not very prominent. However, after a new group of shareholders belonging to the 8x generation “acquires” this company through the stock market, DRH has made great progress.

Accordingly, in 2016, DRH’s after-tax profit reached USD $ 3 million, exceeding 2.7% of the plan and 481.2% increase over 2015. In the plan for 2017, the company sets the target of revenue of more than USD $ 23 million, profit before tax of USD $ 4 million. In terms of scale, DRH is not really big, but in terms of restructuring, DRH experts have identified the speed of development. However, this is just the beginning, because, with the plans announced by DRH leaders, in the next few years, the company will quickly reach the revenue scale of billion.

Besides businesses mentioned above, many other businesses such as Dat Xanh, LDG, Hung Thinh … have shown the jump in business operations. If in 2016, Dat Xanh Real Estate Services and Construction JSC (DXG) is considered to be quite successful in business, by 2017, DXG said, it will grow stronger with expected revenue of USD $ 143 million and after-tax profit of USD $ 30 million, 30% growth over 2016 results.

Likewise, LDG Investment JSC (LDG) achieved USD $ 7 million of profit after tax in 2016, reaching 108% of the plan. In 2017, LDG set a profit target of USD $ 11 million of which, in the first quarter of 2017, LDG recorded revenue of USD $ 7 million. After-tax profit of its parent company was nearly USD $ 2 million, up 160% over the same period in 2016 and completed nearly 25% of the full year target.

Strategy for collecting land funds

According to the reporter of Real Estate Investment Newspaper, business strategy target of most real estate businesses set out in the future, the story of land fund formation seems to be placed on the top. Not so far, the strategy of land fund collection has been quietly implemented during the past time.

According to Phan Thanh Huy, General Director of Novaland Group, to date, the Company has owned more than 40 real estate projects with land plots up to hundreds of hectares and the Group has a reserve fund of more than 10 million square meters of construction space, enough to grow over the next five years.

In the forthcoming strategy, Novaland said, it will continue to increase its land fund through M & A activity in some key projects. The strategy of Ho Chi Minh City and some provinces and cities as rich as Can Tho, Da Nang, Vung Tau… Recently, Novaland has successfully bought a project “land gold” in front of Nguyen Dinh Chieu Street, District 3, Ho Chi Minh City.

business real estate
After Luxcity project, Dat Xanh will implement many other projects

Another big guy also owns a large land fund is Green Land. Over time, this company has quietly carried out a series of acquisitions real estate projects.

According to Luong Tri Thin, Chairman of Dat Xanh Group, the land fund dedicated to the development of apartment projects, the company owns about 80 hectares. If the land fund for development of urban projects is included, the company holds up to hundreds of hectares.

As with DRH, from the beginning of 2016 until now, the company is constantly publishing information acquisition of a series of real estate projects such as apartment complex 177 Huynh Tan Phat, Apartment 277 Binh Binh and the project resort Loc An, Ba Ria – Vung Tau. Most recently, DRH spent hundreds of billions to buy two real estate projects, the Terracotta Hill project and the Metro Valley project.

Of which, the Terracotta Hill project covers an area of over 26,745 square meters, with approximately 140 adjacent houses, with an average area of 105 square meters and four villas with an average floor area of 210 square meters. Total investment is USD $ 85 million. The Metro Valley low-rise project in District 9, Ho Chi Minh City, covers an area of 3.47 ha, with a total investment of USD $ 27 million. DRH invested through the acquisition of a 99% stake in East Saigon Company.

business real estate
accelerate investment and rapid consumption of S-Home apartment projects such as Binh Chieu apartment block I and block H, apartment ToconTap

Talk about land fund collection, cannot fail to mention TDH. According to Hoang, TDH is holding a fairly large land fund and is focusing on finding land funds for the next five to 10 years plan through linkages, auctions, direct compensation in the neighboring areas and neighboring provinces of Ho Chi Minh City and Hanoi. The segment of office and serviced apartments are concentrated in the central districts of the city.

At the same time, to accelerate the investment and rapid consumption of S-Home apartment projects such as Binh Chieu apartment block I and H, apartment ToconTap, ground floor area Binh Chieu 2, project at 28 Phung Khac Khoan …

In addition, TDH also expands its investment to Binh Duong and Dong Nai, and in Binh Duong, TDH will invest 3 projects, including a 65.5ha project in Thu Dau Mot. This is a combined project of traditional markets, 18 hectares in the form of land exchange for infrastructure. The next phase the company will invest nearly 50 adjacent houses and villas.

In addition to the enterprises mentioned above, our records show that many other enterprises, such as Hung Thinh Group and Phu Long Group, have been continuously promoting land fund collection. According to analysts’ analysis, these will be the real players in the market in the near future.

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Real Estate Business: Large Land Fund Will Win
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