Major HCMC-based real estate developers are spending thousands of billions of dong (VND1 billion=$43,000) in other localities to earn higher profits and ensure land supply for future projects.

An artist’s impression of a real estate project in the southern province of Binh Duong. Photo courtesy of Van Xuan Group.

Novaland acquired nearly 300 hectares of land in the southern province of Dong Nai in November for a billion dollars last year. It has also announced plans to increase its land fund in the Central Highlands province of Lam Dong, as well as the central provinces of Ninh Thuan, Khanh Hoa and Binh Dinh. It aims to expand its land fund by 185 percent to 15,400 hectares by 2030.

Real estate developer Hung Thinh Land, which owns 4,500 hectares in HCMC and the neighbouring provinces, is also expanded to other southern provinces and some central provinces.

Another property giant in HCMC, the Nam Long Group, has a land fund of 700 hectares in various localities, mostly in HCMC and the southern provinces of Dong Nai, Long An, Binh Duong and Can Tho. It is reportedly spending an average VND2 trillion ($86.9 million) per year on expanding its land fund.

Property developer Dat Xanh Group acquired nearly 700,000 square meters of land in Binh Duong last year.

Real estate firm An Gia Group, after many years of developing projects only in HCMC, has expanded its market to other provinces by completing a project in Ba Ria-Vung Tau last year. It recently announced plans to buy 40 hectares in Binh Duong, adding that it would spend an additional VND3-5 trillion per year on expanding its land fund outside of HCMC.

The CEO of a real estate firm in HCMC who did not want to be named said a main reason developers were expanding outside HCMC was the time-consuming legal procedures to acquire land for real estate projects in the city.

The high profit margin of projects in neighbouring provinces compared to those located in the city, along with lower cost, abundant land supply suitable for megacity and eco real estate projects were other reasons, he added.

The CEO of Dai Phuc Land, Nguyen Huong, said that property projects in neighbouring provinces would not be able to attract buyers if local dwellers did not have a high demand for housing.

She added that around 80-90 percent of people buying real estate projects in neighbouring provinces were speculators, leading to high vacancy rates and a waste of land resources.

By Trung Tin