Public investment pushes VN real estate

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By the end of August, Vietnam’s Dong Nai province had approved the compensation plan for 4,584 cases with an area of ​​more than 1,900ha and a total amount of compensation of more than nine trillion dong ($400 million). DOANH NHAN

The acceleration of investment in transport infrastructure in Vietnam is the main driving force fuelling real estate stocks as many businesses with large land plots located in areas near key infrastructure projects will benefit from this process.

The government has released the medium-term public investment plan for the 2021-2025 period with a total capital of up to 2.87 quadrillion dong ($120 billion), an increase of 43 per cent compared to the 2016-2020 period. The capital is mainly for investment in transport infrastructure in provinces.

According to Viet Dragon Securities Co (VDS), the total infrastructure investment in the 2021-2025 period in Hanoi is 332 trillion dong, Ho Chi Minh City (HCMC) 638.5 trillion dong and Dong Nai 595 trillion dong.

In the South, it is apparent that most of the key infrastructure projects under construction or planning will pass through Dong Nai province, namely Long Thanh International Airport, Ben Luc-Long Thanh Expressway, Bien Hoa-Vung Tau Expressway, and Dau Giay-Phan Thiet Highway.

Dong Nai real estate market is of special interest to investors. Many large constructors have also become involved in this market such as Novaland (NVL), DIC Corp, Dat Xanh Group (DXG) and Nam Long Group (NLG), to take advantage of opportunities from infrastructure development.

Deputy Prime Minister Le Van Thanh sent a document asking the People’s Committee of Dong Nai to focus on speeding up the progress of compensation for land clearance and resettlement for people, helping speeding up the construction progress of the Long Thanh airport project Phase I.

By the end of August, Dong Nai had approved the compensation plan for 4,584 cases with an area of more than 1,900ha and a total amount of compensation of more than nine trillion dong.

The provincial People’s Committee has also proposed that the government support the locality with more than four trillion dong to invest in two roads connecting Long Thanh airport, including provincial roads 763 and 770B.

According to analysts, real estate projects located around the airport will benefit in the future.

Notably, the Gem Sky World urban area project developed by DXG, enjoying the advantage of infrastructure and synchronous design of the area, has quickly become a hotspot in the province.

The project attracted many customers. Its self-built townhouses were initially priced at 18 million dong per sqm but now, after a year of opening for sale, its price has increased to over 30 million, up by 70 per cent.

The attraction of Dong Nai’s real estate market also comes from its proximity to HCMC, with Long Thanh-Dau Giay Expressway being a key intersection connecting the two areas.

The province also has many large industrial parks, which are the driving force for the provincial economy. Currently, there are 32 industrial parks in operation and in 2021, three more parks are completing procedures. It is expected that in the 2021-2030 period, there will be eight new industrial parks.

According to securities companies, with the above advantages, projects such as Aqua City of NVL, Izumi City of NLG, and Gem Sky World of DXG, are expected to bring benefits to investors and customers who buy early to invest or settle down.

When the social distancing measures are eased and public investment disbursement is accelerated, this group will benefit.

According to ACB Securities Co, in 2021, NVL revenue will total about 21.44 trillion dong, up 327 per cent compared to 2020 and profit will reach 4.39 trillion dong, up 12 per cent thanks to the revenue contribution mainly from Aqua City, Novahills Mui Ne and NovaWorld Phan Thiet.

NLG has just increased its ownership rate to 65 per cent in the Waterfront project, expected to open for sale in the fourth quarter.

According to VDS, in 2021, the main highlight of NLG is stable sales growth. It is estimated that the total sales value in 2021 will reach 9.3 trillion dong from the sale of 2,359 realty products.

Estimated revenue and profit in 2021 is 4.44 trillion dong, up 100 per cent year-on-year, and 1.15 trillion dong, up 38 per cent year-on-year, respectively.

DXG plans to develop urban areas scattered across the country, besides dozens of projects that have been developed, with a total land area of nearly 2,300ha in HCMC, Binh Duong, Dong Nai, Long An, Kien Giang, Khanh Hoa, Bac Giang and Vinh Phuc.

DXG is expected to achieve high growth in 2021 thanks to the handover of Gem Sky World and Opal Boulevard projects and the recovery of the real estate market.

ACB Securities Co Ltd forecasts that DXG’s net revenue in 2021 can reach 9.2 trillion dong, up 219 per cent over the same period last year, and post-tax profit of 1.24 trillion dong.

In early September, DXG was positively evaluated by many securities companies and recommended to buy.