Tan Hoang Minh & Binh Minh Partnered to Manipulate Thu Thiem Price?

By winning the auction of the land lot with the silly price (VND 2.45 billion/m2 ~ USD 107,000/m2), Tan Hoang Minh created a new price peak for the real estate market and at the same time pushed up the land price in this area dizzyingly high.

The “surfing” crowd began to break out when many people who wanted to get rich rushed to hold the land for the price increase.

The stock market was also greatly affected by the developments of this incident when the real estate stock price also continuously danced with each move of Tan Hoang Minh.

Life controlled by…Tan Hoang Minh

Only in the first week of the new year 2022, a series of real estate stocks became the pillar of the market with great gains: CEO of JSC CEO Group increased by 30.5%, LDG of LDG Investment JSC increased by 26.97%, CII of Ho Chi Minh City Technical Infrastructure Investment JSC increased by 24.78%, DIG of Development Investment Corporation Construction increased by 21.1%, GEX of GELEX Group increased by 20.5%, VCG of Vinaconex increased by 8.1%, KDH of Khang Dien House increased by 11%…

Stock investors are expecting but also extremely nervous about the movements of the market in general and real estate stocks in particular in the week of January 10-14. In which the “judgment date” is determined in the first trading session of the week, January 10, 2022. The reason is because this is the final deadline to determine whether Tan Hoang Minh Group will withdraw the deposit or not after the historic land auction on December 10, 2021.

Therefore, stock investors “swing to the top” with real estate stocks are holding their breath waiting for the next move to determine whether they are either “dead or alive”.

If Tan Hoang Minh implements the auction regulations, it will of course be a huge boost to the real estate market, as well as to real estate stocks.

Owner of Tan Hoang Minh plays “Truth or Lie”

On the side of Tan Hoang Minh, the boss of this Group revealed to the press about the super project at the auction land lot worth VND 24,500 billion ̣̣(~USD 1.072 billion). In an interview with Dan Sinh Newspaper recently, Mr. Do Anh Dung, Chairman and General Director of Tan Hoang Minh personally said, the amount of VND 24,500 billion (~USD 1.072 billion) is not too high, if looking at the price the business has to compete with, Capital One up to VND 23,800 billion (~USD 1,041 billion). Since then, he affirmed, his company paid the right price.

Mr. Dung revealed, Tan Hoang Minh will build there a building called D’Billionaire – Billionaire building. “The rich and the super rich who need and want to own an apartment in Ho Chi Minh City which is one of the most livable cities in the world can come here to buy a few million dollars apartments – a price that for their country is very cheap. For the “super-rich”, a few million dollars for an apartment is not a big deal. The problem is to create a worthy product to make them satisfied”.

On January 10, Tan Hoang Minh unilaterally broke the deal of 3-12 land lot auction

Once confirmed to build a building called D’Billionaire to sell to the super rich in lot 3-12 in Thu Thiem New Urban Area (HCMC), but only after 1 month winning the auction, Tan Group Hoang Minh broke the deal.

Accordingly, this is to ensure a stable part of the real estate business market, the interests of the collective and the society above… At the same time, Mr. Dung also sent to the General Secretary and senior leaders sincere apologies.

Mr. Dung affirmed that after winning the auction, he and the Group listened to a lot of public opinion and found that such a high winning result could lead to bad consequences. Especially after receiving the opinion of the Minister of Finance at the last extraordinary session of the National Assembly.

As for the motivation to bid the land at auction at a high price, Mr. Dung said he wanted to make a small contribution to Ho Chi Minh City to have more motivation to overcome difficulties after the pandemic. Therefore, he decided to participate in the auction with the desire to both increase revenue for Ho Chi Minh City and build a modern civilized and beautiful highlight project and contribute to improving the urban architecture of Thu Thiem.

Mr. Do Anh Dung (right) – Chairman of Tan Hoang Minh Group (owner of Viet Star Real Estate Investment Co., Ltd – winning the auction of lot 3-12) received congratulatory flowers from Vice Chairman of Ho Chi Minh City People’s Committee Le Hoa Binh

The letter of Tan Hoang Minh, referring to many high-ranking leaders in the Party, State, Government and National Assembly to ask for a deposit withdrawal of the land lot just auctioned in Thu Thiem

Lot 3-12 that Tan Hoang Minh won the auction, seen from above, January 2022. Photo: Quynh Tran

Market manipulation?

Right after Tan Hoang Minh Group won the bid with nearly VND 2.45 billion/m2 ~ USD 107,000/m2 in lot 3-12 in Thu Thiem New Urban Area, many experts through Tien Phong newspaper expressed concern and suspect this is a market manipulation trick.

Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HoREA) said the land auction in Thu Thiem will leave many consequences. Specifically, the results of the auction of the above 4 land lots were pushed to a level that was too high compared to the real value, not conducive to the sustainable development of the market. “The newly established excessively high land price will benefit developers/investors who have projects and have paid land use levies, but are disadvantageous to developers/investors who have not yet paid or have temporarily paid land use levies. The established high land price will have a negative impact on the central area of ​​District 1, beneficial for super luxury projects, creating a feeling that the selling price of apartments in District 1 is around VND 500 million/m2 ~ USD 22,000/m2 become normal,” Mr. Chau said.

HoREA President also mentioned the fact that after the Thu Thiem land auction, there were some real estate developers/investors who stopped selling or accepted to pay contract fines to “hold” the stock and wait for opportunities to increase prices.

“We are very concerned about some businesses taking advantage of very high price auction wins to apply to revalue assets, especially collateral, to drain banks or to clean up their balance sheets. Auction results can also negatively affect all segments of the real estate market, greatly hindering the realization of the goal of reducing house prices, first of all, of developing social housing, affordable housing in Ho Chi Minh City”, Mr. Chau said.

Economist Le Minh Hoang said: “Such a high price will create a lot of instability for the market. Businesses that are and will be implementing projects may have to pay higher land use fees for the project, thereby pushing up real estate prices. Moreover, based on this winning auction result, many projects in the area will certainly have 10-15% higher prices in the near future. The real estate market will be at a risk of land bubble.”

The obvious consequence is that after the terrible land auction in Thu Thiem New Urban Area, the price of land in Ho Chi Minh City and the stocks of a series of real estate companies suddenly skyrocketed, leading to many consequences for the market and investors.

Real estate stocks paralyzed after judgment date 10/01/2022

During the past time, based on the land price that Tan Hoang Minh bid for, many teams have come up with a formula to multiply the market price by the land fund to value a real estate company, making investors excited about business potential and FOMO (Fear of missing out) made real estate stocks become the strongest gainers in the market, even those with low business results are also increased 2, 3 times.

However, the information that Tan Hoang Minh Group officially withdrew the deposit was like a bucket of cold water poured into the head of real estate investors specializing in “delusions” with sky-high land prices Tan Hoang Minh once introduced.

A series of stocks with land fund concentrated in the southern provinces on January 12, such as CRE, DIG, QCG, TDH, NLG, BCG, DXG, NVL, PDR, VHM, VIC dropped sharply.

After Tan Hoang Minh, Binh Minh is the next one walked away from the auction win

Confirming with VnExpress, Mr. Le Duy Minh – Director of Ho Chi Minh City Tax Department said on the afternoon of February 8, Binh Minh Investment Development and Trading Co., Ltd. had a document sent to relevant agencies to apply for the deposit withdrawal of lot 3-9. Previously, this business has overcome 140 bids with 13 other companies to win the auction of the land lot with the amount of VND 5,026 billion ̣(~USD 229 million) – 6.9 times higher than the starting price.

Lot 3-9 that Binh Minh Company won the auction, viewed from above, January 2022. Photo: Quynh Tran

Binh Minh Company has been quite tight-lipped before. This business has just been established on September 24, 2021, headquartered at building 151, Yen Phu, Tay Ho, Hanoi. The legal representative is Ms. Than Thi Lien (born in 1992). The company initially had a charter capital of VND 100 billion (~USD 4,3 million) and on December 3, 2021, increased its capital to VND 200 billion (~USD 8,6 million).

In the impact assessment report of the land auction in Thu Thiem submitted to the Prime Minister, the Ho Chi Minh City Real Estate Association (HoREA) said with lot 3-9, the city offered a starting price of VND 728 billion ̣(~USD 31 million), Binh Minh won the auction at VND 5,026 billion (~USD 229 million), 6.9 times higher than the starting price, setting the level of VND one billion/m2 ~ USD 43,000/m2. This is the second highest price, just behind the record of the 3-12 lot that Tan Hoang Minh won.

The Association’s report also said the majority of investors (September 6) only assessed the market value of lot 3-9 within a price range of four times of the starting price (about VND 2,920 billion ~USD 128 million) will be feasible for project development. According to the association, the price paid by Binh Minh Company up to VND 5,026 billion (~USD 229 million) with a unit price of VND one billion/m2 ~ USD 43,000/m2 of residential land is “very high” compared to the land price level of Thu Thiem.

According to HoREA’s estimates, with a successful auction of VND one billion/m2 ~ USD 43,000/m2 for lot 3-9, the product price is based on the winning price of land and planning with a 20% profit margin, calculated according to the number of planned apartments, the price reaches VND 78.6 billion ~ USD 3,5 million per unit. The finished product price of lot 3-9 is even higher than the price of apartments of lot 3-12 that Tan Hoang Minh won.

Mr. Le Hoang Chau, Chairman of HoREA analyzed, the auction winning price of land lots in Thu Thiem was too high compared to the market in December 2021. If investors do not aim for “other purposes” and actually deploy luxury commercial housing projects in Thu Thiem land lots, these units may have over-expected the market in next 5-8 years.

Overview of Thu Thiem “golden land” auction

Securities expert Mr. Nguyen Hong Diep – Director of S-Talk Investment Consulting Joint Stock Company said Tan Hoang Minh’s withdrawal caused certain concerns for investors who are clamping down on land or real estate stocks. However, according to Mr. Diep, although Tan Hoang Minh dropped the deposit, it is certain that the real estate price level in the East Saigon area will change in a more positive direction.

Mr. Diep also warned investors against the hot surge of stocks. “I don’t belong to the “gambling” school in stock. I always emphasize the aspect of investing in businesses with transparency and good business results. No less than 3 times I have reminded investors the stock market is like a miniature society. There is a professor, a housewife, a motorbike taxi driver and a butcher. It also has scoundrels, wanderers, parties but the most dangerous are the professional scammers in blue-collars.”

“So instead of wasting time cursing when we lose money, let’s blame ourselves first. We are too greedy, too self-interested when listening, reading, participating in all kinds of rooms just for saving a few dong. While the more important thing is to learn, improve our knowledge, find decent and legitimate consulting places, instead of feeling lazy of reading long guidance or paying fee for consultancy (even very small). Many people just like to be able to buy goods, just like to be told briefly, sell or keep. Taking advantage of our lazy-to-think mentality, fraudsters have brought us into the trap”, Mr. Diep emphasized.

Besides, it is also necessary to re-study the Law on Property Auction and related regulations after this case. The story of a company pushing its bid to an unimaginable level to win the auction and then unilaterally terminating the sale and purchase contract will become a precedent, leading to many unpredictable consequences. It is not clear what the return of the winning land lot is for, but it has certainly caused great fluctuations in the market, affecting the macroeconomic balance, so it needs to be tightly managed.

I believe, after all, Tan Hoang Minh will not suffer

How much did Tan Hoang Minh get after the previous land auction? How does this business benefit after winning the auction? Why are they willing to put down a deposit of nearly VND 588.5 billion (~USD 25.7 million) to withdraw from the game? In my opinion, these are questions that need to be clarified and held accountable for the individuals and organizations involved in order to avoid negative consequences in the future.

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