The Vietnamese real estate market is usually cyclical for about 10 years. And after each such cycle, new players reappear. Unlike the early real estate businesses that went up with a basic process – developing their own land fund and doing projects, the path to becoming the ‘big man’ of later businesses had a point. General: Shortcut by way of project M&A.
From the strategy of “taking a short cut ahead”
With a cycle from 2010 to 2020, such as Novaland, Dat Xanh, Hung Thinh, FLC, Sunshine … And if you consider Covid 19 as the beginning of a new cycle of the real estate market, the name The most prominent for this inception is the Danh Khoi Group.
While many real estate businesses are still struggling to find ways to return to the market after the Covid pandemic, Danh Khoi, a distribution company based in Ho Chi Minh City, is making a strong impression on the public publish a series of information about M&A deals on the media.
Some deals can be mentioned as: Acquisition of 100% capital from Sun Frontier Investment Company Limited to officially become the investor of Sun Frontier project; Acquisition of Danang Hotel And Resort Da Nang project with an area of 7.5 hectares from Hanoi Non Nuoc Tourism Investment Joint Stock Company; Acquired 3 plots of “golden” land with an area of more than 11,000 m2 in Con Tan Lap residential area, Nha Trang city, Khanh Hoa.
Talking about the reasons for M & A for these projects, Mr. Nguyen Quoc Bao, Deputy General Director of Danh Khoi Group, said that M&A is the shortest way for business owners to accelerate the development of clean land fund and implement projects. judgment. Through M&A deals, businesses will save a lot of time in completing legal procedures, as well as solving compensation and site clearance issues. M & A projects are friendly, not only help businesses shorten procedures, but in fact, this story also brings “win – win” for all parties, as well as to the market.
Although Danh Khoi has not officially announced the value of these deals, according to real estate business calculations, with the prime location of the projects, Danh Khoi has to spend trillions of dong to return. become the boss.
This strategy of Danh Khoi immediately attracted attention from the market, investors and observers. Project M&A is a strategy to help many businesses grow in breakthroughs. Therefore, it is not difficult to understand when Danh Khoi chooses this strategy to change his role from a distribution business to an investor in the real estate sector.
However, the problem posed and the observers could not help but ask the question: Where is the financial potential that Danh Khoi can buy so many projects?
In fact, Danh Khoi is not an unfamiliar name in the real estate market. Born in 2006, Danh Khoi is now one of the leading real estate distributors in Vietnam. According to the introduction of this unit, Danh Khoi currently has 10 subsidiaries and associates, providing services and investing in real estate with thousands of employees.
In addition, Danh Khoi also has relationships with many other real estate companies with a charter capital of trillion VND. For example, D&D Engineering Construction Joint Stock Company; Netland Real Estate Joint Stock Company, Danh Khoi Holdings Investment Joint Stock Company, Phu My Infrastructure Construction Company Limited; VHR Investment Joint Stock Company.
To the problem of turning on post-M&A lines
In terms of financial potential, it is clear that Danh Khoi is not a dream man. However, according to many financial experts, in fact, in real estate projects M&A strategies, it is not that the business must have fresh money or not, but the ability to manage cash flow and development capacity. project. If an investor does not have project development capacity, an M&A strategy will be difficult to implement.
In the field of real estate, if the project cannot be exploited by M&A to produce finished products for sale, this advantage will turn into a burden of inventory and capital burial. This is a huge potential risk for businesses.
Observations of Danh Khoi’s projects show that they seem to have prepared situations in advance to avoid this risk. For example, buying a project capable of implementing and selling products right away like Danh Khoi’s has helped the Group save hundreds of billions of dong compared to developing from the beginning of a similar project.
In fact, all three projects that Danh Khoi bought have been completed in terms of procedures, ready for deployment and sales. Even Sun Frontier Project (new name is The Royal – Boutique & Condo Da Nang) has enough business conditions to bring to the market.
Not only the Sun Frontier project, with the Da Nang Hotel And Resort Danang project, after the acquisition, Danh Khoi Group is under construction under the name of a new project called Aria Da Nang Hotel & Resort (Aria Da Nang ). With Con Tan Lap residential area, Danh Khoi Group is turning this golden land into a high-class project called The Aston Luxury Residence Nha Trang and is completing procedures to bring it to the market.
Not only having a legal advantage, with a system of 10 members and 1,000 employees with experience in distributing many successful projects, Danh Khoi holds two keys of success in hand.
Evaluation of the M&A strategy of many real estate businesses, including Danh Khoi, Mr. Le Hoang Chau, Chairman of City Real Estate Association. Ho Chi Minh City said that the real estate market recently has had a strong transition between unprofessional businesses to professional ones. This transfer is extremely necessary, increasing market liquidity, helping to reduce inventories and restore market confidence. “If there are no really professional businesses, there will be no urban areas, projects will be sprouted up methodically and synchronously”, Mr. Chau said and cited, many years ago, in the urban areas. large, many projects have been “blanket” for years, but thanks to the transfer in the market has turned the projects “blanket” into modern residential areas.
According to Market Finance
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