Vietnam: VinaCapital invests $10m in real estate broker CenLand

VinaCapital‘s flagship fund Vietnam Opportunity Fund (VOF) has picked up a minority stake in real estate brokerage firm CenLand for $10 million.

“Vietnam’s real estate market continues to grow, and yet the brokerage business remains relatively undeveloped. CenLand is already the top broker in the north, with the majority of its business in primary sales… We look forward to the company broadening its presence in the secondary market, where opportunities are expected to grow, and to more fully develop and utilise digital sales channels,” said VOF managing director Andy Ho.

The terms of investment include downside protections and performance commitments typical of VOF private equity deals, as well as a commitment to list by the third quarter of 2018, Ho noted.

Founded in 2002, CenLand is one of the top five real estate brokerage companies in Vietnam. In 2017, the company sold more than 11,500 units, thanks in part to its relationships with key Vietnamese developers such as Khang Dien House, Sovico, and Trung Thuy Group.

The company’s revenue reached $48 million in 2017 while profit after tax stood at $11 million. This year, CenLand expects revenue to rise to $61 million on the back of forecasted sales of more than 16,000 units in 71 projects throughout the country.

Since the beginning of the year, VOF has made multiple investments in businesses benefiting from strong domestic growth. Last month, it invested $10 million in Ricons Construction Investment JSC, a subsidiary of the country’s leading developer Cotec Construction Joint Stock Company (CotecCons). In February, VOF invested $32.5 million to acquire a significant minority stake in Ba Huan JSC, the country’s leading eggs and poultry meat producer.

VinaCapital’s flagship fund earlier also invested approximately $45 million into two subsidiaries of PetroVietnam – PV Power and Binh Son Refining and Petrochemical (BSR) – as part of their initial public offerings (IPOs) conducted in January.

By Quynh Nguyen, Dealstreetasia