Vietnamese property developer Hoang Anh Gia Lai Group (HAGL) might be looking for a Hong Kong partner to sell half of its Hoang Anh Gia Lai Land unit, after terminating partnership with Singapore-based firm Rowsley Limited, say industry insiders .
On February 11, HAGL reached an agreement to sell 50 per cent of Hoang Anh Gia Lai Land, the mother company of HAGL Myanmar Co Ltd, which is the owner of the HAGL Myanmar Centre – the biggest complex property project in Yangon, to the Singaporean investor for $275 million.
During the course of executing the deal, real estate investment firm Rowsley asked the Vietnamese group to allow its direct investment in HAGL Myanmar Co Ltd instead of indirect investment through purchasing shares of Hoang Anh Gia Lai Land.
However, due to high tax (40 per cent) imposed on capital transfer in the Burma market, Hoang Anh Gia Lai has declined the proposal, and the two sides have discontinued the validity of the agreement.
In an official announcement by HAGL, it has said to be looking for other investors to jointly develop the HAGL Myanmar Centre. The group’s acting general director Vo Truong Son has also confirmed that the sole reason for the contract termination is from tax queries. Meanwhile, there has been information that a number of foreign real estate companies are in talks with HAGL to purchase Hoang Anh Gia Lai Land and join the management of Yangon’s largest realty asset. A source familiar with the group revealed that Son is eyeing a Hong Kong investor, as in Asia, “Hong Kong is the number one in terms of real estate,” it said. Also according to the source, the price of the future deal will be at least equal to the Rowsley purchase.
In addition, HAGL has decided to rename HAGL Rubber JSC as HAGL Agrico, which will be the focal of all agricultural investment activities of the group. As of the end of last year, HAGL owned 92.13 per cent in the agro-business company. Besides, it will transfer its stake in Tay Nguyen Dairy JSC to HAGL Agrico, which is planned to be listed in July.
Real estate and construction revenue accounted for only 33 per cent of HAGL’s total VND4.86 trillion ($226 million) last year, while the agricultural sector made up nearly 50 per cent. Its net profit was audited at almost VND1.5 trillion ($69.77 million), increasing strongly over 2013.