The United Capital Management Joint Stock Company (Unicap) which manages investment funds will provide financial services to FLC and Faros in the near future.
Unicap said it will set up five real estate investment trusts (REITs) in 2018 with a total capital of VND1.5 trillion (US$66 million). The first REIT covering the investment capital of VND300 billion (US$13.2 million) is under establishment.
This move shows Unicap’s ambitious goal since the number of REITs managed and mobilized by local fund management companies is minimal. TCReit managed by Techcomcap is the only one which is currently in operation.
TCReit was launched in mid-2016 with the initial charter capital of VND50 billion (US$2.35 million) and is now listed on HOSE. After nearly two years of operation, the fund's asset is valued over VND80 billion (US$3.5 million).
According to the regulations, TCReit must invest a minimum of 65 per cent of its net asset value in real estate portfolios or real estate company’s shares. Projects, in which TCReit has invested in, have been almost completed and are generating stable cash flow.
In contrast, other big investment fund management companies such as VinaCapital, Dragon Capital, VFM, SSI AM and BaoViet Fund are hesitant to invest in REIT. One of the reasons is the incomplete regulations on the establishment and operation of this type of fund.
Currently, large-scale REITs are foreign ones such as VinaLand (US$116 million) managed by VinaCapital, Vietnam Property Fund (US$53 million) owned by Dragon Capital. In the market, most of the investment in real estate by investment funds is made through the acquisition of shares of real estate development companies.
Besides investment in real estate, Unicap revealed that it has also expanded into its investment advisory services, connection with investors and other types of investment with the portfolio of VND2 trillion (US$88 million).
These activities will help Unicap to obtain the revenue of more than VND70 billion (US$3.08 million) and profit of VND25 billion (US$1.1 million) in 2018 although the company had an accumulated loss of VND36 billion (US$1.58 million) by the end of 2017.
Unicap, formerly known as Syncap, was founded in 2008. Last year, the former shareholders transferred the entire shares to 12 individuals. New shareholders have increased charter capital from VND40 billion to VND100 billion (US$1.76 million to US$4.4 million) and elected new Board of Directors including individuals related to FLC Group.
Last year, the company drew public attention by valuating FLC Group at US$9 billion, dozens of times higher than its current market value. The figure was estimated based on the total value of projects, investment portfolios, and other assets, taking the future profitability of the Group into account.
REIT is a new option for investors to enter the real estate market in addition to other options such as the direct purchase of real estate, purchase of real estate bonds and investment real estate companies’ shares.
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