The strategy of acquiring projects to increase the land fund at the right time and the right target has helped Nam Long to create a “Big Bang”, initiate the realization of the vision of becoming one of the top township developers in Vietnam.
Land prices jump after Nam Long seals the deal
The real estate market in Ho Chi Minh City has lifted again after a period of supply scarcity as real estate exchanges started selling terraced house products from Waterpoint township developed by Nam Long.
So, after 15 years, the adjustment of Waterpoint value to market price brought in the first revenue of approximately VND 1,930 billion dong and doubled the profit for Nam Long since the beginning of the partnership with TBS Group, Tan Hiep Investment and especially two reputable Japanese investors, i.e. Nishi Nippon Railroad and the government-private sponsored fund in Japan - JOIN to develop 165-hectare phase 1.
It’s worth to mention that the launch of Nam Long’s project also triggered the significant increase in land prices in Long An as investors could see the synchronized infrastructure that is shaping a modern township close to Ho Chi Minh City, which is also the first well planned township in Long An.
Valora properties are the main products launched to market in phase 1. Valora townhouse are priced from VND 2.3 billion dong and Valora villas are priced from VND 3.6 billion dong. These prices have received positive feedback from experts and would quickly attract the market.
After the launch of Waterpoint township phase 1, Nam Long will possibly record the second profit of 30% more after the delivery of Valora products. Nam Long shareholders are indeed most interested in the value of the rest 190-hectare of Waterpoint project which was bought at low price and could be highly profitable after the start of phase 2. This third profit has been an attractive unknown to NLG stock investors.
Becoming one of the leading township developers in Vietnam has been the vision that Nam Long Chairman, Mr. Nguyen Xuan Quang set out when Nam Long was still a newly established company. His vision was reflected in Nam Long’s properly planned and designed townships, including Nam Long Tan Thuan Dong township (District 7, 28 hectare), Nam Long Phuoc Long B township (District 9, 34.7 hectare), Nam Long Phu Huu township (District 9, 17.5 hectare), Nam Long Binh Duong township (12.5 hectare), Nam Long Can Tho township (80 hectare) ...
Nam Long particularly decided to acquire 355 hectares of land and started the site clearance compensation 15 years ago instead of accumulating capital splitting resources onto small projects in the city. This decision had Nam Long going through some difficult years as the economic crisis happened since two third of Nam Long’s resource was tied down to the Long An project. For many years, Nam Long investors had questioned about the release time of this land fund.
As the economy recovered, pioneering investor like Nam Long was well rewarded. Waterpoint Long An became one of a very few large-size projects, and the second largest township in Ho Chi Minh City and surrounding provinces just behind Phu My Hung in size. If Nam Long did not make the land acquisition at the beginning, it’ll be almost impossible to find an available land fund large enough to develop such size of township. The 355-hectare in Long An reminded professional real estate developers like Nam Long of the development vision, just like the story of Phu My Hung built on a swamp 20 years ago.
Explosion of land fund at the right time, with the right target
In March 2019, Nam Long officially completed the acquisition to add an additional 230 hectares in Dong Nai and Hai Phong to its land fund. As soon as Nam Long published the successful acquisition, land prices increased sharply due to scarcity of supply and scarcity of clean and legalized land fund. Therefore, Nam Long has been ahead of the market to purchase new land, lowering the capital cost which will be a competitive advantage for future project development.
With more than 650 hectare of clean land, Nam Long was one of the five public companies with the largest land fund. Waterpoint proportion has been reduced from 2/3 to ½ of the total land fund. Nam Long developed projects across fast growing cities, for example Long An, Dong Nai, Ho Chi Minh City, Can Tho and Hai Phong. The growth rate of Nam Long’s land fund within the first half of 2019 is 50% of the total developed land in the past 15 years. This was considered as an outstanding growth and the explosion of Nam Long’s land fund.
It’s equally important that Nam Long aimed to target large size projects that are suitable for developing "all-in-one" townships and the realization of the vision of becoming a leading township developer in Vietnam.
Besides ongoing projects, including Mizuki Nguyen Son township (South Saigon, 37 hectare), Akari City (Binh Tan, 8.5 hectare) and 165 hectares of Waterpoint phase 1 (Long An, overall 355 hectare), Nam Long also has new projects consisting of Waterfront (Dong Nai, 170 hectare), Nam Long Dai Phuoc township (Dong Nai, 45 hectare) and Nam Long Hai Phong (21 hectare).
With the new land fund, Nam Long drafted a promising development plan from now until 2023. Accordingly, by 2021, 100 Valora villas and 5,252 Flora apartments in Mizuki township. Akari project will complete 5,221 Flora apartments in 2023.
It is expected that by 2020, Nam Long would complete 600 Valora villas in Nam Long Dai Phuoc, 700 houses in Waterfront and 3000 townhouses, villas of Waterpoint phase 1, 850 Valora villas and 2,100 EHome apartments in Nam Long Hai Phong. After 2021, Waterpoint Phase 2 will be officially kicked off.
After the land fund boom, Nam Long has officially entered the booming period of investment and sales of properties in establishing townships.