Capital-thirsty property developers forced to sell

Facing a shortage of capital, many real estate companies in Ho Chi Minh City have been selling off their projects as the last resort.

Irrigation Construction Corporation No. 4, for instance, has sold its Thuy Loi 4 high-rise apartment building project in Binh Thanh District to Irrigation Real Estate Investment Joint Stock Company No. 4 A.

According to Nguyen Hong Phuc, general director of Nha Viet Investment and Construction Joint Stock Company, such changes of ownership were common in the first quarter of this year, though transaction details were often kept secret, especially if sellers were small businesses facing a shortage of capital.

Since the second half of 2010, as the real estate market has taken a downturn, there are many such businesses.

Sai Gon Thuong Tin Real Estate Joint Stock Company’s General Director Bui Tien Thang said credit tightening for property transactions has also put investors under a big pressure.

“Investors cannot get a loan to develop projects and clients cannot get a loan to buy products,” Thang said.

“So if investors don’t sell their projects, they will face more difficulties.”

Consequently, many have sold their projects, especially unfinished ones, and many also plan to sell.

Chuong Duong Corporation is an example. It is negotiating with a foreign partner to sell its Golden Plan Project.

For its part, Khang An Investment Real Estate Joint Stock Company is also proceeding with legal procedures to sell its Tan Tao A residential area project in Binh Tan District also to a foreign investor, Da Cin Holdings Pte.

Meanwhile, Van Phat Hung Joint Stock Company said it would sell some of its projects.

Even foreign investors are facing a shortage of capital. For instance, the South Korean investor of Blooming Park Project (now called Imperial An Phu) in District 2 was also forced to sell to Prudential Vietnam Fund Management Company last year.

Yet, to wealthy buyers, this is a good time to buy.

Doan Nguyen Duc, chairman of Hoang Anh Gia Lai Joint Stock Company, said his company has received many offerings and is shortlisting potential projects before starting negotiations.

“As the realty market is facing many difficulties, this is the best opportunity to buy,” Duc said.  -DtiNews

Tags: Vietnam Property market, vietnam real estate market