Vietnam Real Estate News

Capital needs force companies sell real estate investments   2009-08-05 - DT

Short on capital needed to develop their main lines of business, many companies are liquidating investments in real estate.  Thus a considerable number of real estate deals have been recorded recently.

Green Plaza Hotel in Da Nang

Shinpetrol, a maritime transport company, bled 205 billion dong in the first half of 2009 as the global economic recession impacted ocean shipping.  As a result, Shinpetrol has had to consider selling a piece of its 217 hectare, $1.2 billion Me Linh golf course project near Hanoi.

Both VNECO and Shinpetrol may feel pleased that they can realize a profit from selling off real estate investments.   Meanwhile, Hoa Binh Real Estate Trading and Construction has agreed to sell a 2775 square meter site in Phu My Hung new town (HCMC) at loss in order to take back capital for its main business field.

Two years ago, the company purchased the land with the intention of building and leasing an office building.  However, facing reverses in its main business field, construction, due to bank loan interest rates and construction material price fluctuations, the company has had to sell the project at nearly $12 million, taking a $1.7 million loss.

The office leasing sector has witnessed the most sales. Just two or three years ago, when the office-for-lease market became hot, a lot of companies spent money to purchase land and build office buildings, considering this a profitable and attractive business. However, the investors are now considering selling the projects because leasing demand has been decreasing since mid-2008 due to the economic downturn.

Its main business field is trading petroleum products, but Saigon Fuel Joint Stock Company planned to invest in an office building at No. 143-145 Dien Bien Phu in HCM City. However, the company has realised that it can not profit from leasing offices at this moment and has decided to transfer the project to another partner for 40 billion dong.

Similarly, Anh Duong Vietnam Company, which owns the taxi brand name Vinasun, has also decided to sell a 717 square metre land plot on Thu Khoa Huan Street in HCM City instead of building “Vinasun Tower” as previously planned.  It bought the property for 13.15 taels of gold per square metre and now offers to sell it at 22 taels of gold ($2700) per square metre.

In most of the real estate transfers carried out so far this year, the buyers were domestic private companies.  Bitexco Nam Long, a garment company in Thai BInh province, spent 135 billion dong to purchase Vitek office tower in HCM City. The buyer of the land plot of Hoa Binh Real Estate Trading and Construction Company was also a domestic company, a pharmaceutical producer.

In some cases, Vietnamese investors have purchased a part or all of projects from foreign investors. IDJ Financial, for example, purchased a 50 year lease on Hanoi Plaza for several tens of millions of dollars.   A source said that another Vietnamese company is negotiating to purchase the whole capital contribution of a foreign partner in a well known five star hotel in Hanoi.

Other news

Bidding result of high-rise building project in HCMC cancelled   2009-08-05

Housing tax law will not affect real estate prices   2009-08-04

Houses worth over 600 million dong to be taxed   2009-07-31

Renewal plan spurs apartment prices   2009-07-31

High-grade apartment oversupply forecast   2009-07-29

Ha Noi real estate prices plummet in Q2   2009-07-26

Vietnam sees growing demand for home abroad   2009-07-26

Prime City real estate waits on investors   2009-07-15

Vietnam can export things ‘people want to buy’: HSBC official   2009-07-06

Resort villas sell like hot cakes   2009-06-29

Buyers advised rational behavior in real estate market   2009-06-27

HCM City apartment market: second wave of big sales kick-off   2009-06-25

The private-invested apartment fever in Hanoi   2009-06-24

Why is real estate market in fever?   2009-06-20

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