Housing projects in Thu Duc town in HCMC. Photo by VnExpress/Quynh Tran
Although the real estate market is showing signs of improvement, many companies are still considering selling some prime projects to meet their bond and bank loan obligations.
Recently, LDG Investment Joint Stock Company decided to sell two projects, the Bai But – Son Tra resort in the center of Da Nang city and the C1 apartment complex in the southern province of Binh Duong.
The 29-hectare resort, worth VND4.6 trillion ($191.7 million), located in a prime location, was once considered by LDG as one of its strategic projects.
Management had to use their personal assets to bail out the company.
Hai Phat Investment Joint Stock Company sells its entire stake in the Con Tan Lap residential project in a prime location in the center of Nha Trang city. This involves building three 40-story towers, each comprising three commercial floors, 10 hotel floors and 27 apartment floors.
Although HAGL has not been active in the real estate sector for a long time, at the end of September it announced the sale of its hotel located in a prime location in the town of Pleiku in the Central Highlands to buy back a bond issue.
According to Pham Duc Toan, who has 20 years of experience in real estate brokerage, investment consulting and development, many companies have had virtually no income since the beginning of this year and are therefore forced to sell real estate projects.
But selling them at this stage would not be easy, given the market crisis and unresolved legal issues some face, he said.
The director of a real estate company in Hanoi said it would be difficult to sell projects quickly because M&A transactions usually take six to 12 months.
VnDirect Securities Company estimates that 65.9 trillion dong of bonds will mature for real estate developers in the second half of this year, and 124 trillion dong next year, and so they are under enormous financial pressure.
According to a report from the Ministry of Construction, the number of real estate companies dissolved in the first eight months of this year increased by 30% year-on-year.
Earlier this month, the ministry said the market still faced threats such as an economic recession.