Netland receives Japanese financing for property development

Mar 14, 2019 | 05:37 PM GMT+7

TheLEADERThe proceeds from share issuance to Japanese shareholder will be invested in high-end apartment and landed projects in addition to the current tourism property business, according to Netland deputy general director Nguyen Huu Quang.

Netland receives Japanese financing for property development
Nguyen Huu Quang, deputy general director of property company Netland.

Can you elaborate on Netland’s plan to open representative office in Japan in the coming time?

Nguyen Huu Quang: The office is result of the cooperation between Netland and Sanei Architecture Planning Ltd. Accordingly, Sanei Architecture Planning Ltd will advise all Netland’s activities in Japan and vice versa, we will support all of their programmes and investment projects in Vietnam.

As far as we know, Sanei Architecture Planning Ltd has invested about $50 million in Vietnam and they plan to raise investment up to $100 million. Our Japanese partner will prioritize their investment into our projects.

The representative office will help us introduce real estate projects to Japanese market with the support of Sanei Architecture Planning Ltd. Also, Netland will sell real estate products of Japanese partners to Vietnamese investors.

Vietnamese people have invested in real estate in the U.S. and Australia. So why not in Japan? Netland will pioneer introducing Japanese properties to Vietnamese market.

Netland has negotiated with many foreign investors, but after all, why did you choose Japanese as the main partner?

Nguyen Huu Quang: Netland currently has two major shareholders from Japan, including Sansei Architecture Planning Ltd (10% stake) and G7-Holdings INC (6% stake). We have received interest from other Japanese investors as well.

Before negotiating with Japanese partner, Netland had discussed selling stakes to Swiss, Chinese and Singaporean investors. During the negotiation process, we met Sansei Architecture Planning Ltd representatives.

We decided to negotiate with all investors at the same time on the first-come-first served basis and finally we selected Sansei Architecture Planning Ltd.

I would like to reiterate that Sansei Architecture Planning Ltd was negotiating to buy stake at the time when Netland had not received licence to become a public company. However, the Japanese partner still accepted to buy at very good price. Afterwards, Sansei Architecture Planning Ltd became our main shareholder in February 2018.

Japanese companies have high level in sense of community. When one of them makes investment, others may follow because they will invest on the basis of assessment of the predecessors.

Will Japanese partners provide more financing for Netland or will Netland have to seek bank loans for further investment?

Nguyen Huu Quang: We have so far borrowed just VND38 billion to build our headquater building. The figure of VND20 billion borrowing from foreign partners as provided in our financial statment is actually the deposit of Sansei Architecture Planning Ltd to purchase 2.4 million of shares Netland has just issued to double our charter capital VND240 billion.

We have sufficient financing at the moment and we do not have plans to borrow from banks. However, in the future, it will depend on our development plans to decide whether to borrow or not.

We have used the proceeds from share issuance to develop Barya Citi project, pay land use right fees of Phan Thiet high-rise project. We account for just 20 per cent of Con Tan Lap development in Nha Trang and we have invested in this projects via Japanese financing.

Netland used a portion of equity capital to develop Saigon Metro Mall while the remaining investment capital has been sourced from property sales. We are just the sub-investor of Non Nuoc project, hence we have to deposit only a small amount of capital and then we cen sell. Haborizon project has been completed and this year we expect to recover investment from the co-operation to fund other ongoing projects.

Netland started real estate business via distribution of and the co-investment in tourism property projects. Why did the company choose this segment and do you have any plan to invest in other segments?

Nguyen Huu Quang: Netland started business in a niche market which is tourism property. We distributed and co-invested Queen Pearl Mui Ne resort and then the expanded portion of this project. Netland will continue investing in this segment as it holds great potential with high real demand. Meanhile, land fund is scared in Ho Chi Minh City and profit margin is low.

We are moving beyond tourism property business to develop high-end apartments and land plots in new urban areas.

This year we will develop 1,504-apartment project in Nha Trang and others in Phan Thiet city and ba Ria Vung Tau province.

We will develop the 7-hectare Non Nuoc project in Danang that will villas, condotels and two hotels. Another project is landed development in Ca Mau province.

Which areas will Netland focus on?

Nguyen Huu Quang: We focus on Ho Chi Minh City, Danang, Nha Trang, Hanoi and some emerging provinces such as Long An, Ba Ria Vung Tau, Ca Mau, Dong Nai, Can Tho and foreign markets.