VinaLand Ltd, a unit of Sun Wah Group-led investment fund VinaCapital, said Tuesday it was continuing the ongoing process of divesting from Vietnamese real estate companies, with the latest being the sale of 15 per cent stake in Sai Gon Quy Nhon Tourism JSC, that owns SGT Quy Nhon Hotel in the central province of Binh Dinh.
The fund has profited $630,000 from the sale, or a 27.3 per cent valuation above the net asset value (NAV) of the investment by the end of last year. VinaLand said it acquired this four-star hotel in 2008, and the divestment is consistent with VinaCapital’s plan to exit hotel assets as investment term ends.
The property investment fund’s managing director David Blackhall said in a statement: “This transaction is the ninth full exit since VinaLand’s extraordinary meeting on 21 November 2012,” when its shareholders agreed to extend a three year term to implement the divestment.
The proceeds from the Sai Gon Quy Nhon Tourism project will be used to cover capital commitments and operating costs of the company, Blackhall added.
As of 30 June 2014, the fund earned net proceeds from six hotel and apartment project divestment activities at $31.4 million, representing 11.2 per cent above the net asset value at exit.
VinaLand reported successive losses in fiscal years of 2012 and 2013, at $116.43 million and $149.47 million, respectively.
While concerns are raised whether the fund intends to exit the Vietnamese real estate market, VinaLand stated in its report that it has seen residential sales improve in Da Nang and Nha Trang projects.
“It seems Vietnam is again on the radar screen for foreign investors in the real estate market with a majority of these investors coming from Japan, South Korea, Philippines, Singapore, Hong Kong and Malaysia,” its statement added.
The London Stock Exchange’s Alternative Investment Market listed fund has a NAV as of February-end of $401.6 million. For the fiscal year of 2014, its operation has recovered to make a profit of $27,420.
Residential projects account for the majority of its NAV, typically the Ho Chi Minh City based Centure 21 apartment project (17.1 per cent) and the Da Nang Beach Resort 220ha (13.7 per cent). VinaLand began investment in these two areas in 2006 and is planning partial divestment.