CenLand, the biggest real estate brokerage in northern Vietnam, plans to list 50 million shares on the Ho Chi Minh bourse in the third quarter, to raise more funds to expand its secondary sales business.
At the offer price between 50,000 and 60,000 dong apiece, CenLand will be the first real estate brokerage, specializing in brokerage services only, listed on the Ho Chi Minh bourse. It will be valued at around $100 million. Nikkei reports.
CenLand is set to expand into secondary sales segment, which currently contributes 10% of company turnover, against the primary sales business, which accounts for more than 80%. The company aims to be the leading retailer in the real estate market. It is also working on other fundraising methods to build up strong capital resources to buy parts of or whole real estate projects from developers, then sell on to buyers, as well as for other related trading activities.
CenLand, founded in 2002 as a subsidiary of CenGroup, is one of the top five real estate brokerages in the country. Its sales network consists of more than 1,200 people, 20 direct trading offices and 400 partners countrywide. It has links with some 700 real estate exchange offices across the country, and operates online sales systems including Project Supermarket and the nghemoigioi.vn website, the largest e-commerce platform for real estate trading activities in Vietnam.
CenLand’s partners include local developers Vingroup, FLC Group, SunGroup, Khang Dien House, Sovico, Trung Thuy Group and foreign investors such as Gamuda, Hyundai, and CapitaLand.
Last year, CenLand made more than 11,000 brokerage transactions, accounting for around 40% of the real estate brokerage market in Hanoi and 20% nationwide, according to the company. In 2017 CenLand posted $48 million in revenue and $10 million in net profit, a year-on-year growth of 84% and 87%, respectively. In 2018 CenLand aims to increase revenues by 50% and net profit by 26%, on the back of forecast sales of more than 16,000 units in 71 projects, mainly in Hanoi, the capital.
The secondary sales segment in Vietnam, worth around $20 billion, is covered by small groups, and lacks a broad-scale big player, CenLand General Director Nguyen Tho Tuyen told investors at the roadshow earlier in July.
Vietnam’s real estate market continues to grow, but the brokerage business remains relatively undeveloped. CenLand expects to grow stronger in the secondary brokerage market, and to develop and utilize digital sales channels more, said Andy Ho, investment company VinaCapital’s managing director.
In April VinaCapital’s fund invested $10 million in CenLand, following Dragon Capital’s investment of $11 million. VinaCapital and Dragon Capital own 12% and 13% of CenLand, respectively. CenGroup is the biggest shareholder in CenLand, holding a 51.14% stake.
CenLand launched its first overseas office in 2017 in South Korea, one of the biggest potential sources of foreign investors for Vietnam’s real estate market. The company plans to open new offices in Singapore and Hong Kong, after launching an office in Japan in the next few months.