Billion-dollar projects by Vietnam’s leading property developer Novaland see legal hurdles cleared

Since mid-June, Vietnam’s leading property developer Novaland (NVL) has secured crucial legal approvals for two billion-dollar developments - Aqua City in the south and NovaWorld Phan Thiet in the central region.

Specifically, last Friday, the People’s Committee of the south-central province of Binh Thuan issued a decision allowing a change in land-use status for the Ocean Valley tourism complex in Tien Thanh commune, Phan Thiet town - NovaWorld Phan Thiet.

The decision allows over 3.8 million square meters out of the total nearly 8 million square meters of commercial land at the project to switch from annual land lease payments to a one-off payment for the entire lease term.

The committee instructed relevant authorities to calculate the land rental fee and issue a land use rights and asset ownership certificate to Delta-Valley Binh Thuan Co., Ltd. - the project’s developer - once all financial obligations are fulfilled.

Last Tuesday, the committee also issued a decision approving an adjustment to the investment policy for the NovaWorld Phan Thiet project. The revision focuses on updating the project’s objectives and implementation timeline.

The project’s objectives have been updated to include the development of villas and commercial zones for sale and business use, high-end hotels, bungalows, restaurants, a golf course, public facilities, and a wide range of recreational and entertainment amenities. They are aimed at attracting both domestic and international visitors.

The project is being executed in two phases. Phase 1, spanning from Q3/2008 to Q2/2024, saw the completion of several components, including infrastructure for the resettlement area and the commissioning of key facilities such as the Movenpick hotel, an amusement park, resort villas, commercial townhouses, a golf course, and a beachfront square.

Phase 2, running from Q2/2024 through Q4/2028, involves continued compensation and resettlement efforts, as well as land-related procedures. The developer will also complete unfinished components, finalize permitting, and construct the remaining facilities to bring the entire project to completion.

Earlier, Novaland announced that its Aqua City urban area project in Bien Hoa town, the southern province of Dong Nai had seen its legal bottlenecks cleared after three years.

On June 16, Nguyen Phong An, chairman of the Bien Hoa town People’s Committee, issued decisions approving adjustments to the 1/500 detailed planning for project components, including Aquacity and Aqua Waterfront City urban areas in Bien Hoa town.

At the same time, the planning task dossier for the 1/500 detailed adjustment of the Phuoc Hung island high-end commercial service urban area (Phoenix Subdivision) in Tam Phuoc ward, Bien Hoa town was also officially approved by the committee on June 16.

NVL shares surge over past two months

In 2019, Novaland launched three massive projects, each spanning thousands of hectares and worth billions of dollars, which were expected to redefine the group’s growth trajectory: NovaWorld Phan Thiet in Binh Thuan, the NovaWorld Ho Tram tourism and entertainment complex in the southern province of Ba Ria-Vung Tau, and Aqua City in Dong Nai.

However, the Aqua City project was suspended in 2021 due to delays in planning adjustment approvals and unresolved issues over land allocation for social housing.

NovaWorld Phan Thiet also faced legal hurdles, particularly in land valuation, and has been on hold since 2023 to address outstanding issues.

Clearing legal hurdles is a prerequisite for Novaland to resume working with credit institutions to secure funding, allowing stalled projects to move forward and enter synchronized operation.

Banks have committed credit packages of up to VND7.56 trillion ($289.71 million) for the NovaWorld Phan Thiet project, with disbursements underway in line with the construction schedule.

For Aqua City, a credit package of up to VND3.25 trillion (around $124.54 million) has been disbursed to support the development of subdivisions within the project.

At the same time, several financial institutions have committed to providing additional loan packages totaling over VND10 trillion ($383.22 million) to support Novaland in infrastructure development, construction, and home handovers through 2025-2026.

NVL shares have surged over the past two months, fueled by a flurry of positive legal developments surrounding its billion-dollar projects.

Since the “black swan” event involving the U.S. reciporcal tariffs in April, the stock has climbed from around VND8,000 to VND15,500 ($0.59) per share by mid-June, before stabilizing near that level.

On the Ho Chi Minh Stock Exchange (HoSE), NVL shares closed last Friday at VND15,500 apiece.