Expanding land fund in many ways
Passing the "bottom" of the real estate market, many businesses announced plans to receive project transfers, land use rights... to increase land funds - one of the factors to evaluate the internal "strength" of investors.
A representative of An Gia Real Estate Company said that they still aim to continue expanding clean land funds, prioritizing projects that have been approved for investment policies, are suitable for affordable project development, and have a quick implementation time.
The company is in the process of in-depth appraisal of two potential land funds in District 8 and Thu Duc (HCMC). When the transaction is completed, it is expected to provide more than 4,000 products to the market in the context of increasingly scarce land funds in the city.
Or Construction Development Investment Joint Stock Corporation (DIC Corp) also approved the acquisition of land use rights for Land Lot A2-1, Chi Linh Central Area, Vung Tau City from Holdings Construction Joint Stock Company.
The total acquisition value is nearly 290 billion VND with a transfer price of 50 million VND/m2 (excluding VAT). Construction Holdings Company is an affiliate of DIC Corp, and this project has an area of nearly 100 hectares, with about 70% of compensation.
An Duong Thao Dien Real Estate Investment and Trading Joint Stock Company approved the plan to receive the transfer of land use rights for 8 plots of land all located in Phuoc Long Ward, Thu Duc City, Ho Chi Minh City. The amount to be paid is more than 294 billion VND.
In the Northern region, Ecopark Group is in the process of negotiating to acquire the entire Song Thao Company Limited - the investor of the Thanh Thuy Hot Mineral Resort project in Thanh Thuy town (Thanh Thuy district, Phu Tho province).
At the same time, Ecopark Song Thao Company is allowed to propose adjustments and re-establish the planning of the Thanh Thuy hot mineral resort project with a scale of 65 hectares, and complete procedures to register assets on the land according to the provisions of law.
Many businesses are looking for new land funds (Photo: Quang Anh).
Opportunities intertwine with challenges
The real estate market always gives opportunities to businesses with enough potential in difficult times. The proof is that while some investors have to "cut their blood" to survive, accepting to sell projects and assets, many businesses have risen to the role of buyers - hunting for land funds.
In 2023, the market witnessed the arrival of a group of foreign investors who were quick to join the acquisition race, while Vietnamese enterprises struggled to find capital and maintain operations. Asian investors from Singapore, Malaysia... have continuously appeared in the mergers and acquisitions (M&A) market.
Typical deals include Gamuda Land buying 100% of capital from Tam Luc Real Estate Company to own a project in Thu Duc, Ho Chi Minh City; Keppel Land buying 49% of shares in 2 projects of Khang Dien House Company; Capital Land buying the Tan Thanh Binh Duong complex urban housing project...
Vietnamese investors also participated in some smaller-scale deals, such as Saigonres Group, which carried out M&A procedures to buy 90% of Duc Nhi Joint Stock Company's shares, becoming the owner of a 7,700 m2 land plot in Tan Phu District, Ho Chi Minh City.
Or First Real Estate Company bought 22% of shares of Bach Dang Trading - Service Joint Stock Company, owner of a land plot of nearly 7,000m2 in Da Nang for 8.2 million USD (about 200 billion VND).
The general director of a real estate company based in Ho Chi Minh City admitted that recently, the market has seen an "undercurrent" in the acquisition of land and assets. Many projects have been quietly transferred at low prices because the market has hit "bottom", with the advantage going to those with money. In 2024, the market will witness more name change transactions.
However, in the race to own land funds, businesses must also calculate financial problems in a balanced manner. As in the case of An Duong Thao Dien Company, the business needs to spend more than VND 294 billion for the above 8 transactions, while the amount of cash on September 30 was only more than VND 53 billion, meeting about 18% of the transfer value. This transfer value is also larger than the total value of investment real estate (about VND 274 billion, including land use rights and houses) at the end of the third quarter of 2023.
Ms. Trang Bui, General Director of Cushman & Wakefield, said that the 2023 research data of this unit recorded that foreign investors still accounted for the majority of real estate transactions, acquisitions and investments; while domestic investors accounted for less than 10% of the number of transactions.
According to her, domestic enterprises are still facing many unfavorable factors such as the general economic difficulties, unresolved project legal issues, many shortcomings in corporate bonds, and lack of access to capital flows.
Ms. Trang predicts that the M&A market will still be in the hands of foreign investors. This is also a suitable time for businesses to increase their acquisition or cooperation activities, especially investors with strong financial potential.
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