FLC Joint Stock : Group Seeks Investors in Singapore Roadshow

FLC's executives and experts talk to investors at the FLC Singapore Roadshow & Seminar 2017.

BizLIVE - FLC Group, among the leading real estate developers in Vietnam, is hosting a roadshow in Singapore to introduce its hospitality real estate projects as well as investment opportunities in this sector.

As a pioneer in developing a five-star integrated resort real estate chain across the country, FLC Group is not only providing a catalyst for the Vietnamese hospitality property market, but also reaching out to overseas markets.

FLC Group Chairman Trinh Van Quyet and investors at the roadshow.

The 'FLC Group Singapore Roadshow & Seminar 2017' aims not only to attract more investors for its projects, but also to promote Vietnam's tourism brand, thus attracting capital and cooperation into this sector from international investors.

High hopes pinned for Vietnamese resort real estate

Addressing the event, FLC Group General Director Le Thanh Vinh said Vietnam is expected to maintain an average GDP growth rate of 6.5% to 7% during the 2016 - 2020 period. With a population of nearly 100 million people and an increasing income per capita, Vietnam is gradually becoming one of the most dynamic economies in Asia.

With 12 free trade agreements already signed and 4 being negotiated, together with a stable socio-economic environment, Vietnam will offer great opportunities to domestic and international investors, Vinh added.

In the tourism development strategy approved by the Vietnamese government, it has been decided that this industry would become a spearhead sector of the country's economy by 2020.

On the other hand, in recent years, income per capita has been increasing quickly in Vietnam, creating a tendency to spend more on travel.

With 3,200 kilometers of coastline stretching along this beautiful S-shaped country, numerous gorgeous beaches, unique natural and human characteristics, as well as famous historical and cultural heritages, Vietnam is benefiting from the aforementioned trends to be named as one of the five most popular destinations for international tourists in Southeast Asia.

FLC Group's General Director Le Thanh Vinh.

'We, FLC Group, have been researching carefully and identified that the Vietnamese tourism industry is in a pre-boom period and is full of great opportunities in the resort real estate market', the executive noted.

From 1998 until now, investment from Singapore into Vietnam has been increasing steadily, making Singapore the third-biggest foreign investor in Vietnam with 1,800 projects and a total capital of approximately $39 billion, of which $10.8 billion has been poured into real estate.

'After this seminar, all investors being here today will gain a lot more useful information and find effective investment opportunities in Vietnam, in order to not miss the development of this fascinating resort real estate market,' Vinh expressed hope.

As a pioneer in the creation of large-scale comprehensive resort complexes on the most stunning beaches, FLC stock has been the most liquid one on the Ho Chi Minh City Stock Exchange for many years.

'We hope that this event will be the perfect chance for us to meet strategic investors in both real estate and finance,' Vinh said.

Boom in hospitality real estate in tandem with tourism industry

Nguyen Trong Thuc, director of research and consultancy at CBRE Vietnam.

Nguyen Trong Thuc, director of research and consultancy at CBRE Vietnam, offered a review of the hospitality real estate market in Vietnam as well as legal issues and investment opportunities.

The number of foreign tourist arrivals to Vietnam has been on the rise, from over six million in 2011 to more than 10 million in 2016. Revenues from tourism soared 18% year-on-year from $15 billion in 2015 to $17.7 billion in 2016, suggesting an ongoing boom in the tourism and the hospitality industries in Vietnam.

'With such a momentum, investment in infrastructure of the tourism industry has been surging recently, Thuc said, referring to developments of the aviation sector, evidenced by the upgrade of international airports and expansion of domestic carriers such as VietJet Air and Bamboo Airways.

In parallel with the impressive growth of the tourism industry, the hospitality real estate sector has made headlines, with a series of projects developed or under development at localities that have maritime advantages.

A CBRE research shows that, the hospitality real estate sector benefits not only from an increasing number of tourist arrivals but also from the trend of owning a second home for holidays.

Transactions of hospitality real estate have increased sharply, especially in beach localities such as Nha Trang, Quy Nhon.

Notably, following FLC Group's investment, Quy Nhon in the central province of Binh Dinh has become one of the must-visit destinations in Southeast Asia.
The hospitality real estate market has performed spectacularly, but the room for this sector remains huge as the occupancy rate at Vietnamese hotels in mid-2016 surpassed that in many regional countries, according to CBRE.

In terms of investment returns, CBRE data show that Vietnam's hospitality real estate offers the highest yields in USD terms, outperforming other markets such as Bangkok and Kuala Lumpur.

Investment Opportunities in FLC

Dang Tat Thang, Deputy General Director of Investment at FLC Group, introduced the group's projects to the participants.

FLC has developed and is developing seven hospitality projects across the country, notably FLC Samson Beach & Golf Resort in Thanh Hoa province, FLC Quynhon Beach & Golf Resort in Binh Dinh province and FLC luxury resort Vinh Phuc in Vinh Phuc province.
Real estate service firm Savills has valued FLC's existing portfolio at $3.8 billion.

Dang Tat Thang, Deputy General Director of Investment at FLC Group.

In 2017, the group will give final touches to the FLC Ha Long Golf Club & Resort project in Quang Ninh province, with completion scheduled for this year-end.
FLC also plans to kick off the 500-ha FLC Do Son Beach & Golf Resort project in Hai Phong city, with an investment of 5.3 trillion dong ($250 million).

A perspective design of FLC Do Son Beach & Golf Resort.

The group in May explored a site in the central province of Nghe An for a new complex with an investment of $220 million. In addition, the group will expand operational projects such as FLC Sam Son, FLC Quy Nhon and FLC Vinh Phuc.

FLC is carrying out the FLC Lux City project - the second phase of the FLC Sam Son project - with 70 conveniences and amenities such as hotel, restaurant, supermarket, and theme part. In April, FLC launched FLC Grand Hotel Sam Son, a 15-storey hotel, part of the FLC Lux City project. The hotel stretches an area of 3.6 hectares and boasts 402 five-star keys having areas from 44 sq.m to 158 sq.m, and two 269-sq.m presidential suites.

At FLC Quy Nhon, FLC Group is considering developing the Nhon Hoi urban zone project that will cost billions of USD.

In 2017, the group plans to launch to the market up to 2,500 condotels, 1,400 villas, 2,500 keys and four 18-hole golf courses.

Nguyen Duc Thanh, lawyer from law firm SMiC, gave a review of legal issues related to investment in hospitality real estate in particular and real estate in general.

SMiC has been supporting FLC Group in legal issues and pledges to aid investors when pouring cash into Vietnam.

Hospitality Real Estate Opens up Investment Opportunities in Vietnam

Speaking at the event, finance and banking expert Nguyen Tri Hieu asserted that Vietnam is one of the fastest-growing economies in Asia, with a growth rate of 6.2% over the past decade and expected to accelerate to 6.5-7.0% in the coming five years.

All kinds of market in Vietnam including gold, foreign exchange, securities, money and real estate have been continuously expanding and proven stable.
Notably, the real estate market has recovered from a crisis five years ago, and has returned to the growth track. The hospitality real estate segment has seen an unprecedented boom and offers a spate of investment opportunities.

Finance expert Nguyen Tri Hieu.

Hieu also warned of high interest rates, which the Vietnamese government has been working to pull back. The Vietnamese dong has weakened 1% from the start of this year and may weaken by another 1% through the year-end. This depreciation is considered stable for foreign investors in Vietnam.

Regarding FLC Group, which he has been closely following for years, Hieu expressed impression of the group's $3.8-billion portfolio. With assets worth $800 billion and its capacity of raising funds from the stock market, the company has been capable of carrying out projects with insignificant loans.

Vietnam Is Poised to Embrace Faster Growth

Addressing the event, Vietnamese Ambassador to Singapore Nguyen Tien Minh said FLC Group has made impressive investments recently. He immediately accepted the invitation when FLC expressed its intention to promote investment opportunities in Singapore.

The ambassador reaffirmed that Vietnam is growing in a fast and sustainable way and the growth pace is set to accelerate in the time to come.
Vietnamese Prime Minister Nguyen Xuan Phuc has paid official visits to the United States and Japan where many agreements were signed, suggesting many investors will land on Vietnam. Vietnam's economy is forecast to grow 6,7% this year and 7% next year, he said.

South Korea, Japan and Singapore have been the largest investors in Vietnam, above the U.S. and China.

The ambassador highlighted investments from Singapore, which surpassed Japan to be the largest investor in Vietnam in the first two months this year, indicating the attractiveness of Vietnam. A tally of $14 billion in investment from Singapore made in Vietnam is much smaller than $100 billion the island-state has poured into Australia and China.

Vietnamese Ambassador to Singapore Nguyen Tien Minh.

The Vietnam-Singapore relationship has received a boost since the two countries upgraded ties to strategic partnership in 2013. Vietnam possesses many natural resources and skilled labor force, but needs better economic governance, which is Singapore's strength.

Singapore can support Vietnam in this aspect. The Vietnamese have repeatedly said they want to learn from Singaporeans. Therefore, Singaporean investors are welcomed with the best conditions.

FLC Holds Dialogue with Investors

Commitment to 10% Annual Profit

How can investors put money in FLC's condotels?

Le Thanh Vinh, General Director of FLC: FLC is developing in many condotels projects and other types of hospitality real estate. The group commits to pay an annual profit of 10% in the first ten years and the earnings are shared at an 85%:15% ratio between the investor and the company.

FLC's executives and experts talk to investors.

We are the only investor in Vietnam committed to that rate. The commitment is based on the fact that our projects offer high yields thanks to their favorable locations. The occupancy rate at the projects is high at 80%, even at 90% some time. You can call to book rooms at our hotels and you will see that you will have to wait quite a long time. That is a positive at our complexes.

This is also the reason banks back our commitment to pay an annual 10% profit. In case the developer fails to pay the committed profit, the bank will do it. This is a tailwind for investors in FLC and help FLC go on with the other projects.

What is FLC's blue print in the next five years?

Trinh Van Quyet, Chairman of FLC Group: In the coming five years, FLC will expand its presence to localities that have both beautiful beaches and tourism potential.
We are investing in nine provinces and cities in Vietnam and the number will be 16 in the next five years.

Each resort complex will have a minimum area of 200ha and a maximum if 2,000-3,000ha. Every complex will be developed in a synchronous way with amenities able to meet all demands by vacationers.

Therefore we need a large land fund, and each investment will range from $500 million to $1 billion.

In the next five years, we will complete the project on the Ngoc Vung island, Quang Ninh on an area of 1,700ha, with an investment of $2.1 billion. This is a special project as it incorporate a casino that opens to both Vietnamese and foreign players.

As part of the Van Don Special Economic Zone, one of the three in Vietnam, investing on the Ngoc Vung island will enjoy many incentives. I usually tell my colleagues that the island is even larger than Singapore's Sensota.

In addition, we will develop a so-called golf market project that includes 10 18-hole golf courses in Quang Binh, home to the world-famous Son Doong cave. The project will cover an area of 1,900ha and have 2,000 hotel keys.

These are our two largest projects in the next three to five years. We will also continue investing in Hanoi and many other provinces in the country.

We are also looking at two other big plans in the coming five years, which are opening a new airline and exploiting marble stones for construction. The products will be sold at home as well as exported to other markets, including Singapore.

Foreign investors show interest in opportunities to invest in FLC.

FLC Group has been growing fast in terms of capital, personnel and project portfolio. How can you enhance corporate governance in tandem with your growth, especially risk management?

Le Thanh Vinh, General Director of FLC: We manage risks right from the strategic planning. Our risk management begins with project planning, financial planning and human resources planning, to ensure that the projects are carried out in line with the plan and meet the goals.

FLC has a large project portfolio and each project has its own process to ensure it goes according to the plan.

We pay special attention to the personnel. For every project, we allocate human resources, from the high-ranking personnel to direct employees. We give the highest incentives to our employees and offer them opportunities to take part in big projects.

Regarding corporate governance, we emphasize two points, which is the application of good practices and risk management.

For internal regulation, we have mechanisms for the supervision of all activities, from investment, finance, human resources and quality. In addition, our internal control is very effective.

For external governance, we use services offered by the world's top consulting agencies.

FLC Group operates effectively and smoothly thanks to these mechanisms.

Restart of plan to list shares in Singapore

What can FLC do to support foreigners in buying home in Vietnam? Do you have intention to list FLC shares on an overseas stock market? If any, which one could be?

Trinh Van Quyet, Chairman of FLC Group: Vietnam now allows foreigners to own house in Vietnam. The government is working on procedures that will facilitate foreigners to acquire real estate in Vietnam.

As a joint stock company, we have more than one million shareholders, including domestic investors and foreign individuals and institutions.

FLC itself is listed on the Ho Chi Minh City Stock Exchange and its 5 other subsidiaries and affiliates are listed on the Vietnamese stock market.

I can assert that FLC sticks with the plan to list shares on the Singapore Stock Exchange.

Three years ago, I came to Singapore to look for consultancy from a Singaporean auditing company. However, it was then difficult for FLC as well as Vinamilk to list shares in Singapore due to different regulations on investment and securities in Vietnam and Singapore.

Recently, the Nasdaq Stock Market and Vietnam's VNG Corp. signed a memorandum of understanding for listing. This will open the way for other Vietnamese companies to list shares in New York and Singapore as well.

Financial and securities regulators in Vietnam will soon have to remove obstacles in order to help Vietnamese firms list shares abroad.

FLC has resumed a plan to list its shares on the Singapore Stock Exchange. After this event, FLC will meet with Baker& McKenzie for advice on this issue.

BizLIVE