More closures, layoffs as Vietnam real estate gloom persists

By Vu Pham, Minh Hue
Sun, November 19, 2023 | 9:30 am GMT+7

The number of dissolved real estate businesses in Jan-Oct increased, many other firms have suspended operations, salaries are paid late and employees are being laid off in large numbers.

However, there are some signs of hope amidst the pervading real estate gloom, market observers say.

Many real estate businesses have laid off employees in large numbers to survive amid the market gloom. Photo by The Investor/Vu Pham.

Many real estate businesses have laid off employees in large numbers to survive amid the market gloom. Photo by The Investor/Vu Pham.

Recently, Housing Development and Trading Joint Stock Company (HDTC) in Ho Chi Minh City issued a notice that it had stopped operations and let all employees leave without pay because it was in an extremely difficult financial situation with no revenue.

HDTC used to be a famous brand in the southern real estate market with many large projects and was a company many people dreamed of working for.

During the "golden age" of the property market, the company maintained average revenues of VND900-1,000 billion ($41.21 million) and after-tax profits of about VND140 billion ($5.77 million) per year. But, from 2022 onwards, when the market plunged, it has revealed many weaknesses including legal problems encountered by many projects.

Many other developers have also undergone drastic restructuring over the past year to survive.

For example, Dat Xanh Group has cut a large number of employees. As of September 30, it had more than 2,480 employees, down nearly 1,300 from the beginning of the year.

This group is also restructuring eight subsidiaries: Eastern Real Estate Investment and Service JSC; Dong Nam Bo (Southeast) Real Estate Business Investment Corporation; Dat Xanh Finance Co. Ltd; Binh Phuoc Real Estate Development Investment JSC; Diamond Tower Investment JSC; Ruby Tower Investment JSC; Sapphire Investment JSC; and Emerald Tower Investment JSC.

As of end-September, Phat Dat Real Estate Development Corporation had 254 employees, down more than 100 compared to end-2022, while Khang Dien Group laid off 36 employees in the first nine months of the year.

Sales director of a large company in the Mekong Delta province of Long An, said that 2023 has been a very sad year for his company with its staff strength shrinking from 500 to just 150 now.

This week, the company will cut another 40% of its staff, he said, adding that accessing bank credit remained very difficult because of strict conditions and unattractive interest rates.

"Amid the volatile market, from now until the end of 2023 and the first half of 2024, the company will pursue a cautious business strategy, focusing on completing legal formalities of projects launched in 2020,” the exec said, declining to be named.

It will also continue to improve internal amenities of previously implemented projects, giving customers a better experience, he added.

Chairman of the Vietnam Association of Realtors (VARS) Nguyen Van Dinh said that in the first five months of 2023, the market saw 554 real estate businesses dissolved, up 30.4% year-on-year. The number of newly established firms in the sector plunged 61.4% at just 1,744.

In the third quarter, the situation of real estate businesses showed signs of improvement, with 1,721 companies resuming operations, an increase of 102% year-on-year, he said.

The number of newly established firms in the period was 3.5 times higher than the dissolved (3,394), but still down 52.4% compared to the same period in 2022. Moreover, an average of 107 real estate businesses left the market each month.

Meanwhile, at real estate trading floors, 20% continue to face the risk of dissolution or bankruptcy while 40% are struggling to maintain operations with a few core staff members in the hope that the market will recover by the end of 2023, Dinh said.

Data from the General Statistics Office shows that 1,067 real estate businesses were dissolved in Q3, up 9.5% over the same period in 2022. However, the number of newly established firms was 3,850, six times higher than those leaving the market.

Comments (0)
  • Read More
Oman Investment Authority to expand investment fund in Vietnam

Oman Investment Authority to expand investment fund in Vietnam

Prime Minister Pham Minh Chinh has proposed Oman to enlarge the Vietnam-Oman Investment Fund (VOI) to $1 billion to better cater for the Southeast Asian country's investment needs.

Economy - Fri, May 30, 2025 | 11:26 pm GMT+7

Japanese retailer Aeon to build 2-hectare mall in Vietnam’s Mekong Delta

Japanese retailer Aeon to build 2-hectare mall in Vietnam’s Mekong Delta

Retail giant Aeon will develop a 2-hectare mall in the Mekong Delta province of Tien Giang, with an estimated investment of VND1.16 trillion ($44.6 million).

Industries - Fri, May 30, 2025 | 4:44 pm GMT+7

76% of Vietnamese survey respondents say trade uncertainty encourages them to explore new opportunities: HSBC

76% of Vietnamese survey respondents say trade uncertainty encourages them to explore new opportunities: HSBC

Vietnamese businesses have experienced exponentially higher cost increases than the global average and are expecting additional short-term costs due to trade uncertainty. But many survey respondents (76%) think trade uncertainty has encouraged their business to evolve and explore new opportunities, write HSBC analysts.

Consulting - Fri, May 30, 2025 | 2:41 pm GMT+7

Vietnamese firm lands first $1 mln order on Alibaba after 8-year struggle to export

Vietnamese firm lands first $1 mln order on Alibaba after 8-year struggle to export

After five months of operating a virtual storefront on Alibaba’s B2B e-commerce platform, Sukavina Co., Ltd., a Binh Duong province-based manufacturer of metal tables, chairs, and beds, secured its first international order, marking a significant milestone in the company’s eight-year journey to global markets.

Companies - Fri, May 30, 2025 | 2:37 pm GMT+7

AgriS partners with IFC: Optimizing environmental and social management system, accelerating net zero 2035 goal

AgriS partners with IFC: Optimizing environmental and social management system, accelerating net zero 2035 goal

TTC AgriS (Thanh Thanh Cong-Bien Hoa JSC or AgriS) and International Finance Corporation (IFC) - a member of the World Bank Group - has signed an MoU to strengthen sustainable development governance in alignment with global standards.

Companies - Fri, May 30, 2025 | 2:30 pm GMT+7

Vietnam's stock market attractively priced: Finnish fund PYN Elite

Vietnam's stock market attractively priced: Finnish fund PYN Elite

Vietnam’s stock market is attractively priced, with a price-to-sales (P/S) ratio of 1.3, said Petri Deryng, portfolio manager at Finnish investment fund PYN Elite.

Finance - Fri, May 30, 2025 | 2:09 pm GMT+7

S Korea's SK Group eyes 3 LNG power projects in Vietnam: chairman

S Korea's SK Group eyes 3 LNG power projects in Vietnam: chairman

SK Group, South Korea’s second-largest chaebol, is exploring several LNG-fueled power projects in Vietnam, including three proposed to be included in the country's green growth project portfolio, said chairman Tae-Won Chey.

Energy - Fri, May 30, 2025 | 1:37 pm GMT+7

Vietnam's Hoa Phat Group to become Southeast Asia’s first producer of steel rails for high-speed railways

Vietnam's Hoa Phat Group to become Southeast Asia’s first producer of steel rails for high-speed railways

Hoa Phat Group, a top steelmaker in Vietnam, on Thursday signed an agreement with Germany’s SMS Group under which the latter will provide the former technology and production lines for manufacturing steel rails and shaped steel, with an annual capacity of 700,000 tons.

Companies - Fri, May 30, 2025 | 11:48 am GMT+7

Vietnam's telco giant Viettel signs deal with France’s John Cockerill Defense

Vietnam's telco giant Viettel signs deal with France’s John Cockerill Defense

Viettel High Tech, the core military and civilian R&D arm of Vietnam’s military-run telecom giant Viettel, has signed a cooperation agreement with John Cockerill Defense, a leading weapon designer and manufacturer in France.

Companies - Thu, May 29, 2025 | 9:14 pm GMT+7

MB showcases comprehensive financial solution Biz MBBank at Digital Transformation Day event

MB showcases comprehensive financial solution Biz MBBank at Digital Transformation Day event

Vietnam's leading bank MB on Thursday introduced its latest digital technology solutions, notably the Biz MBBank digital financial platform, at the "Smart Digital Ecosystem in the New Era" event organized by the central bank.

Companies - Thu, May 29, 2025 | 8:02 pm GMT+7

Vietnam's auto distributor TMT to launch $3.8 mln charging station firm

Vietnam's auto distributor TMT to launch $3.8 mln charging station firm

Vietnamese auto distributor TMT Motors has announced the establishment of a charging station company with a charter capital of VND100 billion ($3.84 million).

Companies - Thu, May 29, 2025 | 4:45 pm GMT+7

US's Excelerate Energy affirms intention to turn Vietnam into LNG hub for ASEAN

US's Excelerate Energy affirms intention to turn Vietnam into LNG hub for ASEAN

Excelerate Energy wants to make Vietnam a center for LNG distribution to the ASEAN region, president and CEO Steven Kobos told Prime Minister Pham Minh Chinh at a meeting in Hanoi on Thursday.

Energy - Thu, May 29, 2025 | 4:33 pm GMT+7

Bourse shifts to heat up Vietnam's banking stocks

Bourse shifts to heat up Vietnam's banking stocks

Several Vietnamese banks are planning to move their shares from the Unlisted Public Companies Market (UPCoM) to the Ho Chi Minh Stock Exchange (HoSE) this year, creating new momentum for banking stocks, long dubbed the “king” group.

Finance - Thu, May 29, 2025 | 2:48 pm GMT+7

Dairy giant TH Group proposes 5 projects in southern Vietnam

Dairy giant TH Group proposes 5 projects in southern Vietnam

TH Group, one of Vietnam’s leading dairy producers, has proposed five major projects in the southern province of Binh Phuoc, in the fields of industrial production and urban area, golf course and high-tech agricultural production zone developments.

Industries - Thu, May 29, 2025 | 12:02 pm GMT+7

2024 cyberattack 'a blessing in disguise' for Vietnam's leading broker VNDirect: chairwoman

2024 cyberattack 'a blessing in disguise' for Vietnam's leading broker VNDirect: chairwoman

The cybersecurity breach that major Vietnamese brokerage VNDirect Securities encountered in 2024 was "an unfortunate incident, but also a lucky chance", chairwoman Pham Minh Huong said on Wednesday.

Finance - Thu, May 29, 2025 | 9:48 am GMT+7

Vietnam prioritizes smart, green seaport projects: Deputy PM

Vietnam prioritizes smart, green seaport projects: Deputy PM

Vietnam encourages smart and green seaport investments, as technical barriers related to CO2 emissions and CO2 taxes begin to be tightened up globally.

Infrastructure - Wed, May 28, 2025 | 10:07 pm GMT+7