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Gelex to build five-star complex near Hoan Kiem Lake

Released at: 11:49, 27/07/2016

Gelex to build five-star complex near Hoan Kiem Lake

Photos: Duc Anh

Complex in a prime location in Hanoi to include a trade center, hotel, and office space.

by Ngoc Chi

The Vietnam Electrical Equipment JSC (Gelex), one of the leading Vietnamese electrical device manufacturers, will invest in a five-star trade center, hotel and office complex in a prime location near Hoan Kiem Lake in Hanoi.

The investment was announced in a document to be presented to Gelex’s shareholders meeting on August 1.

The complex has expected investment capital of VND1.9 trillion ($85.5 million) and covers an area of 9,934 sq m on the corner of Ly Thai To Street and Tran Nguyen Han Street, which is currently the site of Gelex’s Binh Minh Hotel.

A representative from Gelex told VET that the complex is the top target in it developing its endeavors in the real estate sector. “The project is still being planned,” she said, giving no further details.

At the upcoming shareholders meeting Gelex will also approve a plan to establish the Gelex Real Estate Company, with charter capital of VND900 billion ($40.5 million).

The company will manage Gelex’s existing real estate projects, such as the new complex in Hanoi, an office block at 52 Le Dai Hanh Street, and shares the company holds in the Melia Hotel in Hanoi, as well as other property projects in the future.

The meeting will also approve a plan to expand into the energy sector by investing in the Gelex Energy Company, with charter capital of VND600 billion ($27 million) and operating in the field of power generation.

Notably, the electrical device giant will also become involved logistics through acquiring shares in the South Logistics Joint Stock Company (Sotrans). Its total investment in the logistics sector is expected to reach VND1.5 trillion ($67.5 million).

In order to boost its logistics, energy and real estate investments, Gelex proposes issuing 77.25 million shares to shareholders at a price of VND18,000 ($0.8) per share. After the issuance its charter capital will increase to VND2.3 trillion ($103.5 million).

Gelex was established in 1990 and officially equitized in 2010. Charter capital at the time of its establishment stood at VND177 billion ($7.96 million) and by the end of 2010 had increased eight-fold, to VND1.4 trillion ($63 million).

In 2015 Gelex’s total assets reached over VND4.9 trillion ($220.5 million), revenue VND8.3 trillion ($373.5 million), and after-tax profit VND455 billion ($20.4 million).

Over the last few years Vietnam has witnessed a trend in which many enterprises not specializing in real estate sector have moved into the sector, with many merger and acquisition (M&A) deals involving targets that own land.

Steel-maker the Hoa Sen Group (HSG) is now stepping up its investments in real estate after unsuccessfully attempting to enter the sector seven years ago. At the end of May it invested VND1.2 trillion ($54.5 million) in a four-star hotel in northern Yen Bai province. “Hoa Sen Yen Bai is the first tourism, service and real estate project of the group, marking a new step in a completely new business sector,” it said in a press release at the time.

The Group also plans to invest in other projects in Yen Bai, such as a spiritual resort on an area of 1,000 ha, including the 400-ha Van Hoi Lake. It will also build a hotel and resort complex in south-central Binh Dinh province.

The Hoanh Son Group, a giant in transport, construction, and infrastructure and based in north-central Ha Tinh province, recently acquired a majority stake in the Phuoc An port project in southern Dong Nai province. The group outlaid VND460 billion ($20.7 million) to buy 46 million shares from the State-run PetroVietnam, which was previously the major shareholder with a holding of 80 per cent.

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