Vietnamese real estate heavyweights Novaland and Hung Thinh receive government support

July 06, 2023 | 14:47
(0) user say
Major Vietnamese property developers Novaland and Hung Thinh are receiving strategic governmental support to untangle the regulatory complexities with their ambitious projects situated in Dong Nai and Binh Thuan, according to an announcement made by Deputy Minister of Construction Nguyen Tuong Van.
Vietnamese real estate heavyweights Novaland and Hung Thinh receive government support

Van revealed at a government press conference on July 4 that a specialist task force, established by Prime Minister Pham Minh Chinh, is dedicated to resolving the intricate issues faced by these property developers.

According to local media Vnexpress, the group has been working diligently on the ground, liaising directly with six local administrations, collating a total of 108 propositions from various businesses, and transmitting these to the concerned provincial people’s committees for a swift resolution.

Specifically, the task force has examined seven large-scale projects under the stewardship of Novaland and Hung Thinh nestled in the southern province of Dong Nai. The principal challenges these ventures confront are based around land use stipulations, including the inability to allocate the required 20 per cent of the land for social housing.

Van confirmed that the task force has generated consultation plans, which have subsequently secured the prime minister's endorsement, paving the way for subsequent stages of the resolution process.

In the central province of Binh Thuan, the task force is also operating in an advisory capacity to the PM and the Ministry of Natural Resources and Environment, assisting with the complications surrounding land valuation, land usage levies, and the certification of land use rights for the expansive Novaland Phan Thiet project.

Moreover, in Ho Chi Minh City, the task force has resolved 30 proposals pertaining to the rehabilitation of apartment buildings, the construction of social housing, and city planning in jurisdictions where complete regulatory compliance is yet to be achieved.

Previously, Binh Thuan forwarded five potential solutions for the Novaland Phan Thiet project, which included retaining the initial investment principles and amalgamating the land lease decisions to simplify the project's legal entanglements.

This gargantuan project, spanning approximately 1,000 hectares and involving a $5 billion investment from Delta-Valley Binh Thuan (a subsidiary of Novaland), is positioned in Tien Thanh. The province has identified five primary roadblocks and proposed specific remedial measures.

At a recent annual meeting, Novaland's chairman Bui Thanh Nhon communicated that the company's restructuring efforts were showing promising signs of progress.

Operational recovery is projected from the third quarter onwards, with a particular focus on projects that are near completion, as well as a selection of projects with high liquidity potential that would benefit from accelerated legal clearance.

Van identified regulations, implementation obstacles, and capital – including the bond market and credit facilities – as the three significant stumbling blocks currently plaguing real estate ventures.

He urged localities to address these challenges as a matter of urgency, emphasising that the authorities at every level must deal resolutely with these issues.

Real estate tokenisation risks must be accounted for Real estate tokenisation risks must be accounted for

While real estate tokenisation offers advantages, it also presents potential risks. De-tokenisation is an important concept which affects the ability of the token to hold its value. It is the litmus test for token holders to validate the legal structure by exercising their rights to redeem the underlying title deed anytime.

Positive developments in the real estate market Positive developments in the real estate market

The SBV has received 24 social housing initiative applications for a $5 billion loan package in six provinces, including 15 social housing projects in the provinces of Bac Giang, Tra Vinh, and Tay Ninh, and nine projects in the provinces of Binh Dinh, Phu Tho, and Ba Ria-Vung Tau.

By Celine Luu

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional