This disbursement to Novaland is a positive sign in the current real estate market beset by the COVID-19 epidemic, with many developers suffering from difficulties in project approval and administrative procedures.
Financial capacity consolidation
At a time when the world financial market is in turmoil, the continued disbursement by international investors to the Vietnamese developer is keeping faith alive in the Vietnamese real estate market.
Novaland Investment Group Corporation (Novaland), a leading real estate developer in Vietnam, is one of the few domestic developers who are receiving active co-operation from international financial institutions.
This group has received the second disbursement of $101 million from its $250 million inaugural syndicated secured term loan facility.
Novaland had previously received the first disbursement of $149 million of this facility in the fourth quarter of 2019. Credit Suisse AG (Singapore) is the Original Mandated Lead Arranger and Bookrunner (OMLAB) of the transaction.
The facility was over subscribed by a number of leading international commercial banks, an endorsement of Novaland’s solid business growth.
As a result of the strong interest, the facility was upsized from its original $150 million target to $250 million.
The facility supports the execution of Novaland’s further business development, including the acquisition of additional land bank and the construction and roll-out of new projects, while diversifying its channels of funding at competitive pricing.
As more encouragement, in the consortium which participated in Novaland’s facility this time, there were some international investors who have never invested in the Vietnamese market before or only poured a very limited investment into Vietnam.
According to Bui Xuan Huy, CEO of Novaland, the group greatly appreciates the investors’ strong confidence and commitment to Vietnam and Novaland in this loan upsizing, especially in these extraordinary times.
“Novaland is well prepared not only to overcome this difficult situation with our tested experience and far-sighted planning but also thoroughly take advantage of appropriate opportunities presented to us during this challenging time,” Huy said.
He added that the group strongly believes in its direction: a centralised orientation, clear business strategy, stable land bank, healthy financial structure, prudent risk management, and strict legal compliance; as well as strong competences to become an international Vietnamese brand.
“We will work more diligently and harder to meet the invaluable trust our customers, partners, and investors placed in Novaland,” said Huy.
Since 2019, through the consultation and arrangement of Credit Suisses, Novaland has received $309 million disbursement from international financial institutions.
Also in 2019, the Deutsche Investitions – Und Entwicklungsgesellscheft Mbh (DEG) – the Investment Fund of the German reconstruction bank KFW, specialised in sponsoring and consulting private businesses with social projects, also sponsored $20 million to develop Azerai Can Tho Resort (Can Tho province) – a pioneer resort in a tourism and entertainment complex named NovaWorld Mekong.
Creating a landmark ecological urban project
In 2020, Novaland has continued implementing Phase 2 of its strategic development roadmap, primarily focused on the development of mid- to high-end properties with developments in centrally-located real estate in Ho Chi Minh City, satellite urban areas in Ho Chi Minh City’s surrounding provinces, and residential projects and integrated resorts (second homes) in high-potential tourism destinations.
In the first quarter of 2020, the real estate market in the south has seen a fierce shortage in supply but Novaland received positive sales in townhouses and villas in Aqua City – the first project invested by Novaland under the ecological urban area concept.
Valencia precinct features a fresh Mediterranean design at the Aqua City Ecological Complex which was introduced to the market only recently.
Aqua City, located on a plot of more than 600 hectares, is the most remarkable project currently in the east of Ho Chi Minh City.
Located in the front face of Lane Way 2 – an arterial road connecting Highway 51 and Ho Chi Minh City-Long Thanh-Dau Giay Highway which is now being expanded, Aqua City inherits the perfect natural features of the existing Dong Nai river system. Moreover, Novaland has reserved more than 70 per cent of the whole project for green spaces and amenities.
Novaland is one of the leading real estate developers in Vietnam. The group now possesses and develops a large land bank covering about 4,900ha to develop housing projects in Ho Chi Minh City, satellite towns, and hospitality real estate projects.
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