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Non-property firms eye property market
While many listed property companies are in a constant struggle to cope with the gloomy market this year, others in different sectors are eager to jump in.
Most real estate firms have made cautious business plans this year. Some shrank their investments in property projects, others planned to enter other sectors.
Hoang Anh Gia Lai, one of Vietnam’s largest property firms, said in the annual general meeting (AGM) that it would shift its investment from the core business to rubber plantations.
The frozen property market forced the Ho Chi Minh City-listed company to switch to the new sector, which is expected to have much higher profit margin, experts said.
Another real estate giant Tan Tao Investment Industry Corporation, which lists on the Ho Chi Minh Stock Exchange with trading name of ITA, planned to delay its property projects in 2011.
The HCMC-based company needs a huge amount of around VND2 trillion (US$100 million) to finish all real estate projects this year. However, the requirement is hardly to be met due to the central bank’s cap on credit to property projects.
Early in March, the State Bank of Vietnam had ordered all lenders to limit credit to non-production sectors at 22 percent of total loans by June 30, and at 16 percent by the end of the year.
Following the central bank’s policy, lenders have tightened lending for real estate and stock market transactions and raised interest rates to as high as 22 percent per annum to these sectors.
At this year’s ACM, Tan Tao will seek shareholders’ approval to defer contributing its shares in series of property projects, including the investment of VND300 billion ($15 million) in hi-tech urban zone Tan Tao – Hanel with an area of 200 hectares in Hanoi.
Sai Gon General Service Corporation planned to make a reduction of VND300-500 billion in its investments in two property projects, which comprises an apartment building and houses in Thu Duc District.
The HCMC-based firm sold the former to an investor, who already paid 20 percent [about VND36 billion] of the project in advance, and reduced investments in the latter.
Outsiders, meanwhile, showed a lot of interests in the market. A slowdown in the maritime sector this year saw Viet Hai Shipping JSC, listing on the HCMC bourse with trading name of VSP, sell some vessels to buy property.
Wall Street Securities Company was also set to allocate 70 percent of its total investment fund to real estate projects. Hanoi-based freight forwarder Vinatrans gained shareholders’ approval to add property service into their businesses.
Hai Ho – Vu Minh
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