Real estate firms lift foreign limits
Real estate firms lift foreign limits
A range of locally listed firms with real estate interests have both lifted their foreign ownership limit to 60 per cent and purchase shares in order to access foreign funding for the development of their various projects.
At its recent meeting, Hoang Quan Consulting, Trading, and Real Estate Services JSC (HQC) announced its plan to broaden its foreign ownership limit (FOL) to 60 per cent, reflecting its plan to attract foreign investors.
According to chairman and general director of HQC Truong Anh Tuan, more foreign investors - mainly from Singapore, Japan, Hong Kong, and the US - are increasingly interested in HQC’s stock. Easing the foreign cap will make the company more attractive and transparent, while facilitating the firm’s development. Under its upcoming plan in 2016, HQC will welcome at least one foreign investor and one domestic strategic partner.
Tuan also announced that HQC had been granted a licence to set up its first branch in the US, known as HQC LLC Limited USA, with the total investment capital of $25 million.
“We expect to grab attention from US investors with our social housing projects overseas, thereby enticing them to acquire holdings in our firm,” Tuan said.
This year, HQC aimed to generate $315 million in revenue and $22.5 million in profit.
Likewise, Thu Duc House (TDH) is also lifting its FOL from 49 to 60 per cent. To reach this goal, TDH will divest from non-core businesses including automobile transportation, customs brokerage, and cargo handling services because the FOLs for these sectors are set at around 50 per cent. Last month, TDH signed a strategic co-operation agreement with the UK’s Pavo Capital to mobilise capital for its large-scale project development. Pavo Capital has been operating in Vietnam for 20 years, with a portfolio of $280 million in assets under management.
With the appeal of real estate market shares, VinaCapital’s Vietnam Opportunity Fund (VOF) has also announced that it would continue to pour capital into real estate companies’ shares. In the future, VOF will divest its shares from construction projects and shift investment towards hotels and offices for steady earnings. As of March 2016, the real estate and construction sectors have taken the lead in VOF’s portfolio with 24.3 per cent.
Andy Ho, VinaCapital’s chief investment officer, said that VOF’s most outstanding investment in the real estate market was the Novaland transaction. Last year, the fund invested $15 million as part of a $47-million syndicated investment into convertible preferred shares in Novaland Group Corporation.
VinaCapital sold 6,000 units in 2015, and is aiming to roll out 4,000 new units this year. Novaland is planning an initial public offering (IPO) in the fourth quarter of 2016, as well as being listed in the stock market in 2017’s second quarter.
“The company is seeking additional capital of $200 million from foreign and domestic investors prior to the IPO,” he added.
Keppel Land Limited -through its indirect subsidiary, Ibeworth - has also entered into a subscription agreement with Nam Long Investment Corporation (NLG) for the subscription of VND 500 billion ($22.5 million) in convertible bonds. These bonds, to be issued by NLG (Bond), will come due in 2020 with a coupon rate of 7 per cent per annum. Keppel Land may convert the bond into ordinary NLG shares, subject to conversion conditions. The conversion price will be VND23,500 (over $1) per share.
Last year, Keppel Land, through Ibeworth, subscribed for 7.1 million new ordinary shares of NLG, representing a 5 per cent stake in the company, at a purchase consideration of about VND140.58 billion ($6.3 million). If the total principal amount of the bond is converted into shares, Keppel Land will hold about 15 per cent in the enlarged share capital of NLG.
