Real estate companies restructure and reveal new directions in 2020

2020 is expected to continue to be a challenging year in the real estate market as the supply continues to be in shortage of new products. This is a challenge, so real estate companies have to restructure and redirect to survive.

According to Senior Director of CBRE Vietnam Duong Thuy Dung, 2020 will be a challenging year for the real estate market because of slow licensing issues and the possibility of credit tightening. Scarcity of the supply in the market makes it difficult for developers, constructors, realtors and homebuyers.

In the actual situation of the market today, many developers have used the M&A strategy of old projects to quickly deploy new projects. MIK has increased M&A projects in the western area of Hanoi, Sunshine Group does M&A activities in Ho Chi Minh City to launch a series of new real estate products.

Regarding brokerage, many real estate agencies are currently focusing on an associate strategy to increase their strength. Most recently, to expand the scale of operations, Cen Homes has launched Cen X Space in cooperation with connected agencies to provide free workspaces in Hanoi, Da Nang and Ho Chi Minh City. Connected agencies are entitled to use the services and technology from Cen Homes including: online apartment status check, deposit and payment.

Cen Land (the parent company of Cen Homes) has 20 representative offices with about 3,000 realtors, 500 connected agencies and authorized agents. Their employees sell products from Cen Land and receive brokerage fees. Recently, Cen Land has signed cooperation agreements to exclusively sell many projects such as Lotus Central, The Manor Central Park, King Palace, Golden Hills, Six Miles Coast Resort, C-Skyview Binh Duong, etc. A lot of houses and apartments for sales are listed on Cen Homes platform.

Sharing about the strategy of Cen X Space, Chairman of Cen Group Nguyen Trung Vu said: "Real estate sales agencies are facing many difficulties, even though they have no real estate products for sale. They sell products of developers while Cen Land cooperate to solve problems, so Cen X Space is launched in Hanoi and Ho Chi Minh City to provide free workspace for connected agencies and build the most powerful sales force in Vietnam".

In terms of construction, Chairman of Hoa Binh Construction Group Joint Stock Company (HBC) Le Viet Hai said that by 2020, HBC would promote the expansion of the overseas construction market and Hoa Binh Infinity Investment Fund was officially put into operation. This will help the Company improve cash flow. HBC plans to issue USD 50 million of convertible bonds to pay short-term debts, increase capital at the end of the year, reinvest in member companies, develop industrial infrastructure and restructure construction material production.

In addition, real estate companies will raise more capital from stocks, bonds, strategic partners and especially foreign ones.

Many real estate companies are operating in other industries. Vingroup is stepping up into the automobile industry, FLC is developing on agriculture and many other real estate companies are promoting infrastructure construction, airports and bridges.

"New steps" of real estate companies in 2020 are essential in the real estate market after dramatic growth. According to experts, proactivity and the right strategy will help real estate companies develop although the market is forecasted to face many difficulties and fierce competition.