After restructuring, real estate businesses confidently accelerate

Many real estate businesses have set quite high business targets for 2024, with some businesses even striving to grow several times more than last year.

Illustration photo.

The hardest part is over.

Novaland has been going through 2023 with declining business results since its listing. This is also the year that the Company has had to strain to arrange capital and restructure debts. Up to this point, according to Novaland, the Company has completed restructuring its loans and bond debts.

In 2024, the company targets consolidated net revenue of VND 32,587 billion and after-tax profit of VND 1,079 billion, respectively 6.9 times higher in revenue and 2.2 times higher in profit compared to the low base level in 2023. If this target is achieved, this will be a record revenue for Novaland.

To achieve billion-dollar revenue, Novaland plans to hand over products from 14 projects. Half of them are in Ho Chi Minh City, the rest are products from the three main projects in Dong Nai, Binh Thuan, and Ba Ria - Vung Tau .

In recent years, transport infrastructure has been continuously invested. Many key projects are being implemented such as the Capital Ring Road 4, Ho Chi Minh City Ring Road 3, North-South Expressway, Bien Hoa-Vung Tau Expressway, Long Thanh Airport, etc. The increased investment in transport infrastructure has a spillover effect, contributing to increasing the supply and value of real estate projects.

However, this ambitious plan depends largely on the legal movements related to the projects that the Company is implementing. Mr. Ng Teck Yow, General Director of Novaland, shared that the legal clearance of the projects is slower than expected, causing Novaland to not fulfill its commitments to customers. This is a huge loss, affecting the brand of the enterprise.

“By all means, the Company must try to overcome, focus on resolving legal issues, and complete products and projects to hand over to customers,” affirmed the CEO of Novaland.

For Phat Dat, by successfully repurchasing 2 lots of bonds with a total face value of 800 billion VND at the end of 2023, Phat Dat officially paid off all bonds on time and ahead of schedule with a value of 2,500 billion VND, bringing the outstanding bond loan balance to 0, completely ending this debt.

This year, Phat Dat's goal is to bring in VND 2,892 billion in revenue and VND 880 billion in profit after tax, up 368% and 35.8% respectively compared to 2023. According to the plan, this real estate company will launch 4 key projects to the market: Thuan An 1 and 2 in Binh Duong , Poulo Condor in Con Dao, Cadia Quy Nhon and Bac Ha Thanh in Binh Dinh.

Mr. Bui Quang Anh Vu, General Director of Phat Dat, said that one of the important bases for Phat Dat to set a high revenue target is because the Company owns a large number of beautiful projects, with complete legal documents, diverse products, designs suitable to tastes, creating high value for the common development of localities.

Expected impact of new law

Along with the market's recovery signals in the first months of 2024, a series of real estate giants have also quickly launched many plans. In particular, the record must be mentioned Vinhomes with a revenue target of increasing by more than 15% compared to last year, to 120,000 billion VND (equivalent to 4.77 billion USD); after-tax profit increased by about 4.3%, to 35,000 billion VND.

Similarly, Nha Khang Dien also set a business target for 2024 with revenue reaching 3,900 billion VND, after-tax profit reaching 790 billion VND, up 87% and 10% respectively compared to the results achieved last year. Meanwhile, Nam Long set a target of bringing in 6,657 billion VND in revenue and 506 billion VND in profit, up 111% and 5% respectively compared to 2023. This enterprise also plans to continue to allocate 192 billion VND to pay dividends, if the profit is higher, it can allocate a maximum of 384 billion VND to pay dividends.

Real estate developers are confident, so brokerage businesses are also quite optimistic when building business plans. For example, CenLand plans to have net revenue of VND3,250 billion and pre-tax profit of VND220 billion, respectively 3.4 times and 44.8 times higher than the results achieved in 2023.

CenLand's Board of Directors assesses that the changes in the Housing Law 2023, the Real Estate Business Law 2023, and the Land Law 2024 are a major step forward in policy, an important legal framework, and have a positive impact on the market, investors, and customers. The real estate market is expected to be more balanced in 2024 when legal and capital issues are resolved.

However, CenLand's Board of Directors warned that although the market is expected to have positive changes in 2024, risks still exist, related to the large corporate bond payment flow.

Mr. Le Bao Long, Strategy Director of Batdongsan.com, said that past legal changes have created major fluctuations in the real estate market. “We expect that with these breakthrough changes in policy, the market will continue to have a positive effect in this cycle, similar to what happened in the past.”

In the period of 2023 - 2025, new laws will be implemented, forecast to create 4 major impacts, including: healthy market growth, investor screening, guaranteed consumer rights, and a tighter management system.

“Customers will benefit from the changes in the law. The two groups that will benefit the most are Vietnamese people living abroad and those who are resettled or receive compensation,” said Mr. Long.

According to statistics, about 15-20% of remittances are invested directly in real estate. Changes in laws, such as allowing overseas Vietnamese to transfer land use rights, will expand opportunities to attract foreign capital into the market.

Source