Berjaya keeps investing into Vietlott despite ailing real estate operations
Berjaya keeps investing into Vietlott despite ailing real estate operations
Despite its failed businesses in the Vietnamese real estate market, Malaysia-based Berjaya Group has committed to invest more in Vietlott to help the firm achieve an annual turnover of VND13 trillion ($572.6 million) and reach a growth rate of 20 per cent per year.
According to Vietnam Lottery Company's (Vietlott) development strategy to 2025 and vision to 2034, Berjaya Group will support the company to reach a turnover of VND117.478 trillion ($5.17 billion) in 2017-2025, equivalent to VND13 trillion ($572.6 million) per year.
Additionally, in 2025-2034, the Malaysian partner will help Vietlott achieve a total turnover of VND258.513 trillion ($11.3 billion) and VND59.398 trillion ($2.6 billion) to pay to the state budget.
On the other hand, despite the huge financial support, Berjaya is facing difficulties in the Vietnamese property market.
In February last year, Berjaya decided to sell 70 per cent of its holding in Berjaya Long Beach Resort Phu Quoc (BLong Beach) to Sulyna Hospitality Hotel Restaurant Travel Service Co., Ltd. (Sulyna), aiming to waive its debt of VND87.5 million ($3.8 million) in its subsidiary of Berjaya Leisure (Cayman).
In 2016, the group reported bad business results at the Hanoi Garden City apartment complex as it was struggling to attract homebuyers.
With an investment of $200 million, the 32-hectare apartment complex was expected to attract many buyers. However, many consumers thought the project might not be the investor’s main concern due to low marketing and inefficient business measures, which was not commensurate with the scale of the project.
As of now, the project’s infrastructure has been finished, along with the high-rise apartment complex, but only a few apartments are being used. It is the same with low-rise villas that stand mostly empty.
Later that year, Berjaya Group was threatened to have the Vietnam International University Township (VIUT) project withdrawn for slow progress. Until now, the project has not been implemented since it received its investment certificate in 2008.
With an area of 925ha and a huge investment capital of $3.5 billion, the investor planned the university on a 100ha site. The township is going to have 20 schools offering education from kindergarten to high school.
The remaining 15ha area is going to be a multi-purpose complex with a commercial area, residential area, administrative and cultural area, and a healthcare centre that will operate in conjunction with the university, as well as a gym and other facilities.
Le Thi Quynh Mai, deputy director of the Ho Chi Minh City Department of Planning and Investment, revealed that only a number of the steps of the project have been completed, including securing approval for the 1:500 detailed planning in 2011 and for clearance compensation in 2013, checking for landmines on a 500ha area, as well as the clearance and compensation of a 100ha area.
Mai also said the project needs extensive land area and high investment capital, but the capacity to disburse registered investment capital is very low.
