Hundreds of “projector” projects in HCM City have been revived after being bought by businesses. This not only releases inventory for the property market but also balances finance for the business.
During the recession of the real estate market in the period 2009-2013, in HCM City alone there are more than 14,000 apartments in stock. Hundreds of “blanket” projects make it difficult for many businesses to find a way to transfer their projects to balance their finances.
Starting in 2014, the market is starting to see the rise of capable domestic investors, taking over to re-launch the struggling projects and eventually become the driver of the M & A race…
The Novaland Group is one of the leading companies in M & A projects. Icon 56 was formerly called Khahomex – Savico Tower. Despite its beautiful location on Ben Van Don Street, District 4 looks to District 1 financial center but has stopped construction for four years. Khahomex -Savico Tower is a joint project between Saigon General Service Corporation and Khanh Hoi Import-Export Joint Stock Company – Khahomex.
Novaland bought a 3,000sqm project and renamed it Icon56. In addition to 300 apartments, Novaland has developed many additional amenities such as swimming pool roof, shopping and entertainment center, office-tel … Currently, the project has been put into use.
Also in District 4, Novaland also revived another real estate project at No. 9, Nguyen Khoai, owned by the Southern Rubber Company. This project has been renamed Galaxy 9. It is built on a land area of over 7,495sqm including two blocks 21 floors with full facilities such as swimming pool, commercial center …
The land is located at 39 Ben Van Don, District 4 previously owned by Quoc Cuong Gia Lai Company. Novaland has bought this land from Quoc Cuong Gia Lai for over VND830 billion and is building the apartment, commercial and office project named The Tresor. Currently, this project is under construction on the 20th floor.
In District 2, Novaland acquired the Lexington project of Dai Phu Hung Real Estate Co., Ltd. Only four of these deals, Novaland spent about VND4 trillion.
By the end of 2016, Novaland has around 40 projects. More than half of them came from M & A projects. This has resulted in Novaland’s land fund booming over the next five years.
Similarly, Hung Thinh Corp is also a prominent unit in the revival of the “projector mats”. For example, at the end of 2013, Hung Thinh opened the 8X Dam Sen apartment project in Tan Phu district, HCMC. Previously, this project was named Hiep Tan by Dai Thanh Company as the investor.
This project has launched products to the market many years ago but encountered when the market is difficult, not mobilized capital should be “cover” so that. When Hung Thinh shook hands with Dai Thanh to inject capital, speeding up the construction has revived this project. At present, the project has been handed over the house.
Similarly, the project of apartment 27, Truong Chinh in District 12 with 16 floors by Kim Tam Hai Company as the investor was started in October 2009 but the construction of the raw work is out of money. Hung Thinh Corp has invested about VND40 billion to help investors complete the project. In return, Hung Thinh will be in charge of marketing and be selling the remaining 80 units of this project.
In addition, Hung Thinh Corp also spent up to VND2,000 billion to acquire a series of projects 8X Plus, 8X Thai An, 12 View, Tan Huong Tower … Up to now, Hung Thinh has bought nearly 20 projects. Of these, 10 have been rebuilt and sold to the market, the others will be launched in the near future.
2016 is the year witnessing the strong M & A of Green Land. Moving from a real estate brokerage firm, Green Land Group is gradually asserting itself by acquiring a series of projects from the beginning of the year.
At the beginning of 2016, Green Land massively took over many projects in Ho Chi Minh City. The first is the transfer of Kim Khi apartment project of the Corporation Kim Nai Ho Chi Minh City at Nguyen Van Quy, District 7 with a value of VND102 billion. At present, Green Land has renamed the project to Lux Garden, building 500 apartments with total investment capital of 975 billion dongs.
At the end of January 2016, Dat Xanh continued to add VND 1 billion to Agriculture Printing Joint Stock Company, raising chartered capital to VND111 billion to invest in the project of Hiep Binh Chanh Ward, Thu-Duc District. After the acquisition, the company has renamed the project to Open Tower with a total investment of VND625 billion.
One day after spending VND61 billion on Agricultural Printing Joint Stock Company, Green Land decided to transfer the project of Cecico 135 Office and Apartment on Pham Van Dong Street, Hiep Binh Chanh Ward, Thu Duc district with the value of VND66 billion.
Currently, this project is called Opal Skyview. Total investment of Opal Skyview is VND296 billion with 80 apartments.
In total, Dat Xanh has spent more than VND2,000 billion, earning the right to develop more than 120,000 sqm of land with estimated investment capital of about VND10,000 billion for M & A projects in 2016. Green land is almost alone, not the joint venture, affiliated with other partners.
A new name on the field of reviving the “dead” project is An Gia Investment. Recently, An Gia Investment and Japanese investment fund Creed Group announced the completion of the acquisition of seven blocks under the Lacasa Complex residential project in District 7, Ho Chi Minh City from Van Phat Hung Group.
In phase one, An Gia Investment bought two blocks in March 2015. This is also the sixth project implemented by this company in the form of M & A in the past.
Residential Complex Lacasa is about 6 hectares with 2,000 apartments, with a total investment of about VND3,500 billion. This will continue to be a project in the high-end segment so An Gia Investment has spent more than 3.5 hectares of land to build utilities serving residents.
In order to develop the project, Creed Group is committed to pouring $200 million into An Gia Investment, making it a multi-billion-dollar company.
Prior to that, Creed Group and An Gia Investment quickly accelerated the acquisition of old projects. The first is to develop Angia Riverside and Angia Skyline projects from two blocks of the Lacasa project acquired by An Gia Investment in phase one. Currently, 90% of the 800 apartments have been sold.
These two companies have also cooperated with Phat Dat Real Estate Joint Stock Company to restart the project of River City with the scale of 11.25ha, expected to be delivered in 2019.
Prior to the Creed Group’s participation, An Gia Investment also undertook a series of acquisitions over the years. All are “revived” after the transfer to An Gia Investment.
Typically, the Tan Phu project of Tan Phu District acquired by Nakyco Investment Co., which was handed over to customers in June 2016, has rapidly increased by 40%. The project of Angia Star in Binh Tan District acquired by Tan Binh Construction Investment Joint Stock Company is also expected to be handed over in the second quarter of this year.
In addition, many other businesses such as Sacomreal, Hung Loc Phat, Vietcomreal … also bought the project “dead” to restart. It is worth mentioning, these projects when in the hands of new businesses are revived strongly, open projects to sell out there.
2017 will explode
Explaining why M & A is the way to go instead of developing the land fund for new projects, Mr. Luong Si Khoa, Vice Chairman of An Gia Investment Board, said that M & A projects The project helps the company save a lot of time in completing legal procedures and solving problems related to compensation and land clearance.
If you develop a new project, this stage can last up to more than a year while the market is showing good signals so take advantage of the opportunity to introduce the product immediately.
Secondly, most of the projects are located in beautiful locations, large land fund, the developed infrastructure of living combined with the advantage of the experience of An Gia Investment and strong cash flow from Creed Investment Fund Group will help the company easily develop new product line more suitable.
“After acquiring the projects, we will fully exploit the advantages of positioning, be improving design, be adding utilities, adjusting prices, and be introducing customer acquisition strategies. Effective sales. This is how An Gia Investment has applied to many M & A projects before and was successful “- Khoa said.
Le Hoang Chau, chairman of the HCM City Real Estate Association, said most of the deal was done by local companies. Many businesses have land funds but due to lack of experience in selling, lack of capital or not segmented can be through the M & A deals to deal with inventory, bad debt in the market.
Businesses that are struggling, after transferring the project to potential companies, will be able to recoup their capital, repay their debts, and restart their business plans.
“The government should have a more open mechanism on the issue of transferring the project. When the enterprise already has a red book, or has paid compensation but no longer has the money to do the next stages, it can transfer it to the enterprise which is more effective in implementing and putting the land into circulation to avoid the overheating situation. land, incurred bad debt, money buried in the land, “Mr.Chau said.
According to Mr.Stephen Wyatt, General Director of JLL Vietnam, also said that 2017 will be the record year of M & A real estate. “Vietnam’s economy is constantly improving with positive economic indicators and is recognized as one of the most promising markets in the Asia-Pacific region,” said Mr.Stephen Wyatt.
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