International funders in frenzy over Novaland smart strategy

Since 2019, it has become a common trend for major real estate developers to march down to localities outside big urban metropoles like Hanoi and Ho Chi Minh City. An established developer based in the southern hub of Ho Chi Minh City, Novaland is increasing its land bank through M&A deals, paving the way for the launch of coveted real estate properties in diverse segments of the central hub of real estate (Ho Chi Minh City), urban satellite real estate (Dong Nai), and resort real estate (Can Tho, Ba Ria-Vung Tau, or Binh Thuan).

Along with this, in 2019, Novaland had rolled out the first eco city project named Aqua City in Dong Nai province’s Bien Hoa city featuring shophouses, as well as isolated and twin villa complexes with a chain of complimentary intra-area utilities. Notably, the Aqua City project has aligned with green living standards and succeeded in creating modern living spaces close to nature.

Customers visit the mock-up unit of Aqua City at Novaland Expo in December 2019

As for resort property, Novaland gave birth to two sizeable premier developments – NovaWorld Phan Thiet (Phan Thiet city, Binh Thuan province) and NovaWorld Ho Tram (Ho Tram town, Ba Ria-Vung Tau) – stretching over 1,000ha of area with the second-home line-up buoyed with international-standard facilities.

The projects received warm feedback with high take-up rates.

Ocean-front second-home lineup at NovaWorld Phan Thiet entertainment resort complex of Novaland Group

By virtue of bold ventures into untapped niche-markets, Novaland has gained upbeat business results. According to the group’s 2019 audited consolidated financial report, Novaland registered a cumulative net revenue touching VND10.931 trillion ($475.26 million) and after-tax profit of VND3.387 trillion ($147.26 million), reaching full-year plans.

The group’s total asset value saw a 30 per cent jump on-year to VND89.978 trillion ($3.9 billion), attesting to Novaland’s constant growth, of which short-term assets accounted for 79 per cent of the total, tantamount VND71.195 trillion ($3 billion), soaring 42 per cent compared to the end of 2018.

Inventory value jumped 84 per cent to around VND57.2 trillion ($2.5 billion). Remarkably, up to 89.5 per cent of inventory value belonged to properties that are under construction and many other projects about to kick-off construction in the upcoming years. This high rate of inventory in these projects shows that Novaland has a vast available land bank and project portfolio for deployment in 2020 and the times ahead, laying the bedrock for its sustainable development in the future.

Being listed in VN30, Novaland was also listed on the Singapore Exchange Limited (SGX) on April 30, 2018. According to Global Capital, Novaland is a special case. Its deal is the first equity-linked bond in Vietnam in six years, breaking the lull that has persisted since a similar deal was made back in 2012. When Novaland ventured down the path of raising capital through an equity-linked and share sale combination, it took things up a notch in the region’s equity capital markets and was only worth looking at closely by other potential issuers in the region.

In the last quarter of 2019, Novaland raised $600 million through three trenches with support from Credit Suisse. $310 million of this was disbursed last year and the remaining $290 million is set to feed the group’s business activities this year. Investments from international institutions have often been accompanied by very strict requirements. In fact, not many firms have managed to mobilise foreign capital to the extent that Novaland has.

Lately, as a fresh boon to shareholders, the group has rolled out a special promotion programme to customers who are Novaland shareholders when purchasing villa and shophouse products at Aqua City or second-home products at NovaWorld Phan Thiet and NovaWorld Ho Tram between February 25 and June 30, 2020.

Along with this, customers who have been holding at least 1,000 Novaland (NVL) stocks for at least six consecutive months will be able to enjoy a discount of VND55 million ($2,390) when buying products during the same period. The programme will run alongside other promotions at each project.