Why did Sanei Architecture Planning Ltd select Netland to cooperate?
Kikkawa Kazuo: Sanei Architecture Planning Ltd has taken part in Vietnam for 3.5 years and invested in eight real estate projects, including apartments, hotels and office buildings. We have made co-operation with four partners inclusive of Netland, the partner that we signed a comprehensive co-operation agreement in December 2018 after being a strategic and major shareholder.
The sale process is a key role that all of Japanese real estate investors are deeply concerned when investing in Southeast Asia market. As a result, Sanei also has the same sense when investing in Vietnam real estate market.
As the scenario in Vietnam, we can make a pre-sale with the mobilization up to 50 per cent for FDI projects. Based on our strategy thinking about the output of project products, a partner has a strong advantage in distribution in Vietnam market could become an important player.
Netland has a “top 3” distribution system in southern Vietnam real estate market that met our conditions. In the future, we would like to join in projects that have highly efficiency based on a good sale strategy. So from my inner thought, we believe that Netland will become one of the top real estate development corporations in Vietnam. Therefore, we signed the agreement and invested in Netland projects.
Do you mean that your company will give priority to Netland projects?
We have a priority for projects in city center but we will focus on proposed projects from Netland as well.
Can you talk about some advantages of Sanei Architecture Planning Ltd in Japan? And how does Sanei Architecture Planning Ltd expect to improve these in Vietnam market?
With the low rate in growth of Japan economy, Sanei is a company having the new business model in real estate market. For 27 years after establishing, the profit of company always increases year by year. For details, during 27 years, revenue of Sanei has increased 120 times.
When the real estate market in Japan is still rising slowly at the present, Sanei seems to be a good corporation with that impressive growth rate. Our target products are affordable houses in center and neighbored areas in the scenario of deflation market like this.
By the way, those products must be rich in design and in harmony with surrounding environment. Sanei’s target customers are the persons who buy the house for the first time, with the average age from 30 to 35.
Sanei has taken advantage in 3 huge-city sectors including Tokyo sector (Tokyo, Kanagawa, Saitama, Chiba), Chukyo sector (Nagoya) and Kansai sector (Osaka, Kyoto, Kobe). In addition, in the 27th year, Sanei also promotes the investment in other real estate sectors as office buildings, hotels in Japan.
In Vietnam market, Sanei is in the research of big city sectors, finding out special business models for these and try our best to support Vietnamese corporations. So, we really expect to the co-operation with Netland, a company with a strong real estate distribution strategy as well as good development in real estate products.
At this moment, Vietnam has a rapidly growth rate in economy and there are some points as same as the Japan market in the past. Then, Sanei would like to share more good things from Japan and hope that we will contribute something to the development of both countries.
Now in the Vietnamese real estate market, there is a successful cooperation between Japan investors and Nam Long Investment JSC. So is there anything from this deal that Sanei Architecture Planning Ltd and Netland can seek out?
Now, we have discussed with Netland to figure out a suitable development direction. The cooperation between Nam Long Investment JSC and Japan investors is a successful model but in the fact that Sanei and Netland are on the other way from that model.
We think that there will be so many housing development models when an amount of residents would like to gather in big cities as Vietnam. Nam Long is a good example to seek out, but it is still not our answer.
How much has Sanei Architecture Planning Ltd invested in Netland and do you intend to increase this rate?
We currently own a 18.75 per cent stake in Netland. Whether to increase this rate or not, it will depend on mobilization policy and business plan of Netland. However, we still would like to increase this owning rate to come together with Netland and make Netland stronger day by day.
What would Sanei Architecture Planning Ltd do to help Netland in addition to the investment capital?
Sanei had the ability to maintain a high growth rate and has got such achievement as today in the Japan economy of slow growth, so I think there are lots of things that we can support Netland.
Besides, Japan has an old population and Vietnam is on the rapid growth way. Except Sanei, there will be a lot of other Japanese companies concerning to invest in Vietnam real estate market.
What do you expect from Vietnamese real estate market in the long term?
I think the Vietnam land price at this moment is quite high. The world real estate is forecasted to get a new situation. What Vietnam real estate developers can do to create the intrinsic value reflecting on the real demand of Vietnam market is very important.
As a result, I think that making the real demand is very important. I am so happy because Netland’ strategy since the first days is always creating the intrinsic value, this is the key point to minimize the risk when the market has a fluctuation.
What is your expection of Netland share price?
I think that the market price of Netland shares is still very low compared to intrinsic value of company. Thus, the strength of Netland are both in real estate development and distribution. However, Netland still does not fully exploit their advantage.
The disadvantage of Netland is that they do the branding job not good enough so the investors still do not know as expected. About the domestic investors we don’t have the documents, but about the Japan market Netland is the name very familiar to Japan investors at this moment.
Through the grand opening of Netland in Japan that helps Japan investors know Netland more. I think, except the core business, Netland must do IR job as good as they did in Japan market.
Netland will create a better business value better in the future and the market price will be equal or greater than the intrinsic value of company. And I hope that Netland will become a real estate corporation representing for Vietnam.