Low-cost homes seen as lifeline for troubled developers in Viet nam
03-05-2013
A low-cost apartment project in HCMC’s Binh Tan District - Photo: Dinh Dung
Most property companies are looking to the low-cost home segment in their 2013 strategies as local housing demand is rising. In fact, many firms were able to minimize losses last year by shifting investment to this segment earlier.
Financial reports of multiple industry players show that they still earned profits, albeit small, and that the revenues might have come from different sources, from property trading, financial investment to services.
Truong Anh Tuan, chairman of Hoang Quan Consulting - Service - Trading Real Estate Corp., said his firm posted more than VND300 billion in sales and nearly VND20 billion in profits last year. Hoang Quan’s sales and profit are lower than in previous years but its business result was still healthy in the context of the dreary market in 2012 when a slew of stocks were labeled bad or stopped from trading.
Tuan ascribed the positive performance partly to the fact that his company had focused on developing homes for low-income people with a series of projects in districts 2, 12, Hoc Mon and Thu Duc in HCMC.
Meanwhile, the firm offered townhouse lots for sale at VND250 million to VND600 million each in other provinces. For instance, the Cinderella project in the southern province of Ba Ria-Vung Tau created revenues for the developer during 2012.
Hoang Quan announced to take part in the country’s low-cost housing program with a complex project in the Mekong Delta province of Vinh Long and the HQC Plaza scheme in HCMC’s Binh Chanh District.
Similarly, Thuduc Housing Development Corp. (Thuduc House) recorded a consolidated after-tax profit of some VND27.5 billion at the end of 2012, just nearly half of the year’s plan. That was the first time in 11 years that Thuduc House had posted the lowest after-tax profit as a result of the worsened 2012 business situation.
Most revenues of Thuduc House came from management of farm produce markets which posted a growth of 19%, while its sales from realty trading fell sharply. Entering 2013, the enterprise continues to follow the realty industry as the core business but will pay more attention to building low-cost homes like S-Home products.
Facing the same woe, Petro Capital and Infrastructure Investment JSC (Petroland) experienced a challenging year to achieve sales of VND500 billion and a meager pre-tax profit of VND956 million. In 2013, Petroland still has two apartment projects in District 2 and District 7 to be completed and delivered to homebuyers.
