Realty developer Novaland revives work on 2 more key projects

Leading Vietnamese property developer Novaland is returning engineers to two major resort entertainment projects where work has been paused as it had run out of funds.

The Ho Chi Minh City-based company resumed on Friday the construction of NovaWorld Ho Tram located on Ho Tram beach in Xuyen Moc district of Ba Ria-Vung Tau province, southern Vietnam. The resumption involves the Habana Island and Wonderland zones inside the entertainment complex.

A similar resumption is set to start on May 19 for another resort complex project – NovaWorld Phan Thiet in the south-central coastal province of Binh Thuan. Vietnamese bank MB planned to sign a deal with Novaland that day as the provider of funding for the new stage.

Leading construction company Hoa Binh Construction Group, also based in HCMC, is the building contractor in both major projects. Hoa Binh halted work at both at the end of 2022 due to tough situations in the real estate market, including the prolonged credit crunch.

Hoa Binh said it is in a position to resume work on two hotels – the Grand Mercure at NovaWorld Ho Tram and the Novotel Phan Thien at NovaWorld Phan Thiet.

Novaland’s resumption of the two major projects follows the renewal of a loan from Vietnamese lender TPBank signed on April 19 for The Grand Manhattan complex in HCMC’s District 1. It is a 39-story marquee development in the city’s heart, and this construction resumption is expected to help boost the liquidity of the ailing realty market.

The property market started to undergo woes in the second quarter of 2022, and Prime Minister Pham Minh Chinh and several regulators have continually made efforts to tackle the legal, regulatory, and credit crunch hurdles. Market experts and businesses expect to see a market recovery in the fourth quarter of this year.

In Dong Nai province bordering HCMC, Novaland's Aqua City, a 305-hectare urban area being under construction, is one of the seven major real estate projects already put on the province’s list waiting for removal of legal and regulatory obstacles.

Novaland earned revenue of VND11.15 trillion ($474.5 million) last year, a year-on-year reduction of 25%, according to its 2022 audited report. The major’s after-tax profit fell to VND2.18 trillion ($92.76 million), down 36.85% year-on-year, and equal to about one-third of its 2022 target.

The developer has not announced its business plans for 2023.

Novaland, listed on the Ho Chi Minh Stock Exchange as NVL, closed the Friday trading session at VND13,700 ($0.58) per share.