Sacomreal lures investors with luxury apartment
By Dinh Dung – The Saigon Times Daily
HCMC – Sai Gon Thuong Tin Real Estate Joint Stock Company (Sacomreal) late last week announced its luxury apartment project in HCMC’s District 7 to calm property investors and homebuyers who have invested in the project by buying bonds.
The announcement comes when bonds fall due and Sacomreal is rolling up its sleeves to pay back investors who bought bonds at VND1.5 billion each and earned the right to buy one of the apartments upon completion of the project.
The project is scheduled to begin in December for completion by the second quarter of 2012.
To carry out the project, Sacomreal issued 8-month-term bonds and mobilized some VND750 billion in which bond holders were offered an 8% discount on the total value of one apartment at 8% interest, or 1% per month.
Dang Hong Anh, general director of Sacomreal, said that the gloomy property market forced the company to drop its original price of VND24 million per square meter to VND18 million per square meter and that it would refund the difference, including interest, to bond holders in the coming days as contracts were signed. Bond holders reserve their right to buy apartments until deposit day.
Sacomreal this year has three times issued bonds as a way to mobilize capital for developing its property projects since the Government’s credit tightening policy to cool down the feverish property market.
The company has witnessed nearly 40% of its investors, who bought bonds in the first issue in January, translate the bonds to deposits for buying apartments due to the slowdown of the real estate market.
Sacomreal says it plans to mobilize VND2,000 billion by derivatives such as bonds and stocks to serve upcoming property projects.
Some experts say that while real estate companies are not borrowing from banks due to high interest rates, derivatives such as bonds and stocks are channels for mobilizing capital.
So far, such capital mobilization has yet to be standardized and regulated but is based on investor confidence and the prestige of the issuing company.