Robust investor appetite and soaring demand for quality housing in cities have pushed Vinhomes, the luxury villa development arm of Vietnam’s biggest property developer Vingroup (VIC), to become the second most valuable listed firm in the Southeast Asian country as the property player made its stock market debut at a premium.
Nearly 2.7 billion VHM shares were listed on Ho Chi Minh City Stock Exchange (HoSE) on May 17 with the reference price of VND92,100 ($4) apiece. During the opening session, the shares increased to VND110,500 ($4.8) apiece, up 20 per cent compared to the reference price. At the time of publishing the article, Vinhomes was trading at VND110,500 ($4.8) apiece.
“The listing on the stock market will improve the company’s ability to raise funds for new projects,” said Vinhomes CEO Nguyen Dieu Linh.
At that opening price, the high-end real estate developer is valued at $13.2 billion, only behind its parent company Vingroup JSC at VND324 trillion ($14.2 billion).
The successful listing debut is supported by fast-rising demand for housing in Vietnam which has about 32 million people living in urban areas, accounting for approximately 34.1 per cent of the total population, according to a recent statistic.
The listing of Vinhomes has contributed to raising the capitalization of the entire market, creating opportunities for domestic and foreign investors to invest in enterprises operating in Vietnam’s real estate sector, the Hanoi-based realty developer stated in the official announcement.
After listing, Vinhomes aims to accelerate the development of new projects in the near future, especially the “satellite city” strategy which will develop projects around central Hanoi and Ho Chi Minh City and provinces with potential development in Vietnam.
The GIC-backed Vinhomes, which offers both high-end and affordable homes, will also step up affordable housing project Vincity scheduled to start later this year, providing 200,000 to 300,000 units to the market by 2020.
In the middle last month, Vingroup raised $1.3 billion from Singapore’s wealth fund GIC by selling a stake in two units and through a loan. The capital raised will be used to fund the units’ projects, Vingroup said in its statement.
Parent Vingroup is the biggest shareholder in Vinhomes, with a 69.66 per cent stake as of April 20, followed by Singapore sovereign wealth fund GIC with 5.74 per cent.
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