Nguyen Duc Thuy, the tycoon of ThaiGroup, has injected huge sums of money into the ‘golden land plots’ in Hanoi and high-end resort projects on Phu Quoc Island after he bought Kim Lien Hotel in Hanoi.
The billionaire has cooperated with Hyatt Hotel Group to develop a 5-star hotel capitalized at $165 million.
Thuy is well known as a giant in cement production, transport, insurance and securities investment, therefore, the information that he pours money in real estate projects is 'red hot news’.
The tycoons in the south have also jumped on the bandwagon. The Ho Chi Minh City Infrastructure Investment JSC (CII) has set up a subsidiary specialising in making investment in real estate with the chartered capital of VND1 trillion ($45.5 million).
| Vietnamese tycoons in cement and transport, steel and securities companies all have shown their interest in real estate projects recently. |
Duc Long Gia Lai, which invests in agriculture, energy and electronics manufacturing, has kicked off three real estate projects with total investment capital of VND4 trillion ($182 million).
Le Phuoc Vu from Hoa Sen Group, a steel manufacturer, has also started the construction of a 4-star hotel in Yen Bai City capitalized at VND1.2 trillion ($54.5 million). Four subsidiaries of the group have been established with the focus on real estate investment.
The group is nurturing an ambitious plan to develop a spiritual & ecological tourism complex covering an area of 1,000 hectares in Binh Dinh province.
In fact, Hoa Sen once tried to invest in the real estate sector in the past, but it failed. This was, as explained by the group’s president, because the time was not right for the group.
Not all tycoons can succeed with real estate projects though they have powerful financial capability.
Mai Linh, once the nation’s leading taxi firm, for example, made a false step when injecting money into real estate.
The misstep was so serious that Mai Linh fell into liquidity problems. It could not pay debts even after it tried to cut the labor force and representative offices. And it had to sell more than 1,000 cars to get money to pay part of the debt.
It lost the Number 1 position in the taxi market to the hand of Vinasun.
Similarly, Tan Tan, a food processing company and Techmart, a steel manufacturer, also had bitter deals with real estate projects.
Meanwhile, president of Vina Megastar, Nguyen Hoang Long incurred big debts and was arrested for swindling SeABank to appropriate VND30 billion ($1.3 million).
