Vietnam to have a big real estate group

Vietnam to have a big real estate group
15:25' 13/04/2007 (GMT+7)
VietNamNet Bridge – Lilama Corporation is joining forces with Hanoi Land Company to set up a joint stock company, specializing in real estate trading, Lilama Land, which is expected to be one of the biggest real estate groups in Vietnam.





The group is expected to have the chartered capital of VND1tril ($62.5mil), and its first job is to build and develop the 700 ha heavy industry complex in the northern province of Hung Yen. The complex will gather the plants and workshops of Lilama’s member companies. Lilama plans to set up a manufacturing factory here with the total capital of up to $200mil.



The real estate company will also develop the projects on trade centres, office buildings for lease and hotel development. At least 10 real estate projects will be undertaken in 2008 with the total investment capital of several hundred millions dollars.



Lilama Land will only eye the big-scale real estate projects capitalized at several hundred million or several billions dollars.



Under the plan to renovate and restructure enterprises, Lilama has been chosen as the nucleus to form up multi-sectoral group with the focus on manufacturing mechanics and construction. The establishment of the Lilama Land is a part of the long term development strategy. Lilama Land will be backed by the parent corporation, Lilama. Besides, the real estate trading company is also planning to cooperate with investment funds and foreign partners.



Lilama plans to make the 10% capital contribution to the VND1tril real estate company, while Hanoi Land makes another 10%, and other founding shareholders contribute 20% of total capital. The remaining 60% of capital will be raised from the public through share issuance.



As planned, Lilama Land will increase its chartered capital to VND3tril ($187.5mil) by the end of 2007, and VND10tril ($625mil) by 2008. The company would list its shares at the Hanoi Securities Trading Centre (HSTC) in 2009, when the capital raising is completed.



“Lilama would be inferior to any international real estate group in terms of capital,” Le Trung Kien, Chairman of Lilama Land stated.



Mr Kien said that the company founders initially planned to have VND1tril in capital, but investors have registered to invest more than VND20tril ($1.25bil) so far. Many international finance and real estate groups have expressed their willing to make capital contribution to become strategic shareholders.



Mr Kien believes that Lilama Land will have competitive edges if compared to the real estate investment funds operational in Vietnam. Lilama now has several land plots in very advantageous locations to develop.



“Soon after Lilama Land becomes operational, we will announce a very impressive investment portfolio,” Mr Kien said.



He has also revealed that in the long term development, Lilama Land will list on the Hong Kong stock exchange. Now a US-based big financial investment fund has agreed to give advises to Lilama Land to help the company to list on an US stock market at appropriate time.