By Yantoultra Ngui, Phuong Nguyen and Anshuman Daga
March 20, 2023 6:00 AM GMT+7 Updated 3 months ago
SINGAPORE/HANOI, March
17 (Reuters) - Asian real estate giant CapitaLand Group is in talks to acquire
assets worth roughly $1.5 billion from Vietnam's biggest listed property firm
Vinhomes JSC (VHM.HM), two sources familiar with the matter told
Reuters.
A deal of that size
would mark one of the largest real estate transactions in Southeast Asia in the
last few years.
The talks come as
Vietnam's property sector is struggling with a cash crunch following an
anti-graft campaign launched by the government last year.
Discussions between
CapitaLand, majority owned by Singapore state investor Temasek Holdings, and
Vinhomes, which has a market value of $8 billion - have taken place for some
projects owned by Vinhomes, four sources told Reuters.
Vinhomes, Vietnam's
biggest real estate developer by market capitalization, is part of
Vingroup (VIC.HM), the country's largest conglomerate.
One of the sources
said CapitaLand is considering buying part of Vinhomes' Ocean Park 3 project, a
294-hectare resort city style development near the Vietnamese capital city of
Hanoi, or another project in the northern city of Haiphong.
The value of the deal
was still being negotiated, the person said, adding the talks reached advanced
stage.
The sources declined
to be identified due to the sensitivity of the matter.
When contacted by
Reuters, CapitaLand Development did not directly comment on any potential deal
with Vinhomes but said: "Vietnam is one of CapitaLand Development's core
markets. We constantly evaluate investment opportunities to grow our presence
in the country."
CapitaLand
Development, part of CapitaLand Group - which has a presence in 40 countries -
develops retail, office, residential, business parks and data centres among
other businesses. It already has a portfolio of residential projects, including
luxury condominiums, in four cities in Vietnam.
Vingroup declined to
comment on any discussions with CapitaLand, but said that as a listed company
it would disclose information if any transactions happen.
Vingroup, which is
involved in real estate, automobiles and retail, is investing billions of
dollars to develop VinFast (VFS.O), its fledgling electric vehicle car maker.
Vinhomes develops and
owns residential and commercial real estate projects in Vietnam, a country
which has a population of 100 million and was Asia's fastest growing economy
last year.
The economy expanded
by 8% last year, the fastest pace in 25 years, backed by strong
retail sales and exports, but is facing headwinds from a global slowdown.
A property crisis that
started last year, sparked by problems at one of the country's largest property
groups No Va Land (NVL.HM), has battered investor confidence as authorities arrested
high-level individuals and overhauled the country's bond sector.
Vinhomes was spun off
and listed on the local stock exchange in 2018.
Vinhomes' net profit
dropped 26% to 29 trillion dong ($1.23 billion) in 2022 from a year earlier,
while total revenue declined 27% to 62 trillion dong.
Shares of Vinhomes
have lost 10% so far this year, after tumbling 40% in 2022 as the property
crisis deepened.
($1 = 1.3489 Singapore
dollars)
($1 = 23,580 dong)
Reporting by Phuong
Nguyen in Hanoi, Yantoultra Ngui and Anshuman Daga in Singapore; Editing by Kim
Coghill
https://www.reuters.com/markets/deals/singapores-capitaland-talks-buy-vietnam-property-assets-vinhomes-sources-2023-03-17/
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