HCMC-based infrastructure builder CII to develop retirement-healthcare real estate

Ho Chi Minh City Infrastructure Investment JSC, or CII, plans to develop a retirement real estate model that integrates healthcare services.

The move towards the new model is rooted in the recognition that Vietnam has the fastest aging population in the world.

It will target middle-aged individuals, near-retirees, families with elderly members as well as overseas Vietnamese and foreigners seeking to retire in rural areas with their families.

The company says it plans to select locations that are well-connected to existing and future highways to facilitate access to Ho Chi Minh City.

Apart from the new model, CII is also known for owning two companies with significant land holdings: Nam Bay Bay and Thu Thiem North One Member Co., Ltd.

CII recently announced that one of its subsidiaries has been approved as the investor for a real estate project in the western part of HCMC.

This 5.2 hectare service, commercial and high-rise apartment project with a total expected investment of VND4,478 billion ($180.2 million) will supply more than 2,100 residential units, including apartments, townhouses and shophouses.

Le Quoc Binh, the company’s general director, said that successfully completing the legal procedures for the new project marked the beginning of CII's future real estate initiatives, leading to increased revenue, profits and cash flow.

Originally focused on infrastructure development, CII manages and operates seven BOT (build-operate-transfer) projects that generate toll revenues of VND 7-8 billion ($321,970) per day.

It is also involved in BT (build-transfer) projects, exchanging land for infrastructure, which has allowed it to accumulate a clean land bank for real estate development.

To further its real estate ambitions, it has acquired a listed firm, Nam Bay Bay (NBB).

Acquiring NBB shares

Earlier this year, CII's board of directors announced plans to acquire NBB shares of Nam Bay Bay Investment JSC, aiming to increase its ownership from 37.52% to a maximum of 79.8%. As of early October, CII had raised its stake in NBB to 59.54%. Nam Bay Bay used to be a subsidiary of CII with the latter holding up to a 94% stake.

Nam Bay Bay, primarily a real estate developer, began with the North Phan Thiet-Binh Thuan commercial center and residential project and has expanded its investments across various provinces and cities.

In HCMC, Nam Bay Bay has developed several projects including high-rise apartment complexes like City Gate Towers, Diamond Riverside, NBB II and NBB Garden III.

The company also has projects in other provinces, including Doi Thuy San in Quang Ninh, Son Tinh Residential Area in Quang Ngai, De Lagi Residential Area in Binh Thuan, and the Ward 2 Residential Area in Bac Lieu town.

CII leaders have identified potential in the NBB II (Binh Chanh district) and NBB Garden III (District 8) projects, which include residential land and other types of land, presenting opportunities for investment in social housing under the amended Land Law 2024.

As of June 30 this year, CII had invested VND882 billion ($35.4 million) in NBB Garden III and VND829 billion ($33.36 million) in NBB II, both of which have completed the compensation process for relocated residents.

Additionally, the De LaGi project has received the 1/500 planning approval from the People's Committee of LaGi town in Binh Thuan province.

Le Quoc Binh, general director of CII, said that while investment in the De LaGi project was initially modest, the company planned to enhance it, given the competitive landscape of PPP projects and the scarcity of coastal land along key regions like Ho Tram and Novaworld Phan Thiet.

By the end of the second quarter, the company had invested VND1,039 billion ($41.8 million) in the De LaGi residential area, which covers a total of 124.53 hectares and requires a total investment of VND 2,726 billion ($109.7 million). So far, the People's Committee of Binh Thuan province has assigned 67.45 hectares to the company.

For the Son Tinh residential area project, spanning over 102 hectares with an investment of VND1,752 billion ($70.5 million), CII has spent VN 611 billion ($24.5 million). The company is trading on the land with infrastructure, and will complete compensation-site clearance work and construct infrastructure on the remaining land.

Projects in Thu Thiem new urban area

In addition to Nam Bay Bay, CII has two fully-owned subsidiaries operating in the real estate sector: Thu Thiem North One Member Co., Ltd. and Dien Bien Phu Highway Investment Co., Ltd.

Thu Thiem North focuses on infrastructure construction and high-end real estate in the Thu Thiem new urban area, HCMC.

Other than completed projects like Lakeview 1 and 2, D'Verano and The River Thu Thiem, the company has several projects at the investment preparation stage including Lakeview 4, D'Vernal, RiverFront Residence and The River 1 with total investment value nearing VND6,000 billion ($241.5 million).

Meanwhile, Dien Bien Phu Highway Investment has already handed over a project at 152 Dien Bien Phu street, which combines high-rise office buildings with a commercial center.

The real estate segment has significantly contributed to CII's revenue and profit in 2022-2023 due to the delivery of projects, an ongoing process.

However, in the first half of this year, the company’s real estate revenue dropped sharply from VND709 billion ($28.5 million) to VND 211 billion ($8.5 million), with gross profit at just VND30 billion ($1.2 million), equivalent to 27% of the same period last year.

The company expects revenue from the real estate sector to remain challenging in 2024 and 2025 due to slow legal processes.

CII shares, listed on the Ho Chi Minh Stock Exchanged, closed Monday at VND16,050 ($0.65) apiece.