21 Nov 2014 10:15
RNS Reach
21 November 2014
VinaLand Limited
Divestment of partial stake in Capital Square project, Danang City
Ho Chi Minh City - VinaLand Limited ("the Company" or "VNL"), the AIM-quoted investment vehicle established to target strategic segments within Vietnam's emerging real estate market, announces that it is divesting 2.07 hectares of land being the residual Phase 1 land which sits within the Capital Square project (previously known as World Trade Centre), an approximate 9 hectare site situated in Danang City.
The subject site, with a total area of 2.07 hectares, is located directly adjacent to the Azura apartment tower completed by VNL in 2012. The Capital Square site was acquired by VNL in 2006 for development into a mixed use complex, and is located in the city centre of Danang. In 2009 the project broke ground on the first residential tower, the Azura. Given the Company's ongoing divestment strategy, the Investment Manager concluded that VNL should no longer continue with the development of the commercial component of the project. VNL has signed an agreement to divest its 38.25% holding in the site to a large retail developer and mall operator who is proposing to develop the site into a modern shopping mall and hotel which, when completed, will generate significant retail and entertainment amenities in the vicinity. This could therefore act as a catalyst in driving demand for the planned residential projects on adjoining land, of which VNL is a stakeholder. To facilitate this divestment, the Investment Manager converted the Phase 1 land to commercial use while transferring the residential use to Phase 2. This transaction resulted in net proceeds of USD3.2 million for the Company which is 3% below the corresponding estimated NAV for this parcel of land at the time of the exit. Due to the transfer of land uses the corresponding comparable value of the subject land was not determined at the time of the Extraordinary General Meeting ("EGM")in November 2012. The majority of the proceeds have been received with the remainder expected to be received in the first quarter of 2015.
Speaking on the transaction, Managing Director, David Blackhall stated, "The closure of this transaction is consistent with the Company's strategy agreed at the EGM in November 2012 where shareholders supported a new three-year term, which included a revised strategy focused on the realisation of assets. Furthermore, the acquirer is proposing to commence the development of a large retail centre that will generate considerable business activity in this precinct, which could have a positive impact on demand for residential stock on the adjoining site, retained by VNL. The proceeds will be deployed to cover the continuation of the share buyback programme and operating costs of the Company."
Enquiries:
David DropseyVinaCapital Investment Management LimitedInvestor Relations/Communications+84 8 3821 9930david.dropsey@vinacapital.com
Philip Secrett
Grant Thornton UK LLP, Nominated Adviser
+44 (0)20 7583 5100
philip.j.secrett@uk.gt.com
Hiroshi Funaki / Andrew DaviesEdmond de Rothschild Securities, Broker+44 20 7845 5960funds@lcfr.co.uk
David Benda / Hugh JonathanNumis Securities Limited, Broker
+44 (0)20 7260 1000
funds@numis.com
Andrew WaltonFTI Consulting, Public Relations (London)+44 (0)20 7269 7204andrew.walton@fticonsulting.com