VinaCapital decreases real estate holdings

On May 25, VNL announced on its website that it had divested its entire stake in HBT Court, a serviced apartment building in Ho Chi Minh City that it acquired in 2007. The disposal will result in net proceeds of $534,000 to VNL, including adjustments for additional investments and dividends from the project over this period.

In the same month, VNL has made two other divestments. On May 20, the company announced the divestment of its stake in the Danang Golf Project. The project, acquired by VNL in 2006, is situated in Danang on a 219.8 hectare land area and includes a completed 18-hole golf course with related facilities as well as residential dwellings, some of which are currently under construction. VNL will transfer its entire stake to An Phu Import Export Investment and Trading Company Limited. This transaction will result in net cash proceeds of $37.4 million to VNL, and an internal rate of return (IRR) of 8.9 per cent.

On May 11, VNL announced that it is divesting its entire stake in 21st Century International Development Joint Stock Company (Century 21 Project) located in Ho Chi Minh City. The site is a future residential-mixed use development site, with a total area of 301,060 square metres, which was acquired by VNL in 2006 for residential and mixed use development. VNL’s entire stake in Century 21 Project will be taken over by Khai Hung Real Estate Co., Ltd. This transaction will result in net cash proceeds of $75.4 million to VNL.

According to VNL managing director David Blackhall, all divestments are consistent with the Company's strategy agreed on at the EGM in November 2015, where shareholders supported a 12 month extension of the strategy focused on the realisation of assets. The strategy, in turn, was agreed at the November 2012 EGM.

“Further details on the proposed $35 million capital distribution will be announced in due course, with the expected timing to be early June 2016,” he added.

Meanwhile, VOF also announced the disposal of its entire stake in Danang Golf Project to An Phu Import Export Investment and Trading Company Limited for net cash proceeds of $12.2 million. On May 11, VOF also announced selling its entire stake in the Century 21 direct real estate project to Khai Hung, making a net gain of $28.7 million on the deal.

“Over the past few weeks, we have taken great strides in reducing our real estate direct investments and look forward to putting the proceeds to work in asset classes and sectors where we see greater opportunities for significant growth,” said VOF managing director Andy Ho.

According to Ho, VOF’s strategy is to reduce direct real estate holdings, while at the same time remaining opportunistic in market areas where it sees significant potentials, namely privately negotiated deals and OTC investments.

“We continue to see robust deal flows in these asset classes, as reflected in our recent OTC investment into Airports Corporation of Vietnam and our privately negotiated investment into Thai Hoa Hospital. We are evaluating a number of very attractive opportunities in the pipeline. Our fully realised private equity investments have delivered an IRR in excess of 20 per cent to date, and we believe these types of investments continue to offer the most attractive returns in the market,” he said.