Local commentators said M&As in golf courses had become a trend recently, mostly involving Vietnamese investors.

A few months ago, Singapore firm TCI transferred its entire 75 per cent stake to Protrade, its local partner in the 27-hole Song Be golf course in the southern province of Binh Duong, Dau Tu (Vietnam Investment Review) newspaper reported.

No information on its value was available. This 100-ha golf course along Binh Duong Boulevard in Thuan An Town’s Lai Thieu District came into operation in 1994 with 18 holes after two years of construction. Some 13 years later, the course was expanded to 27 holes.

Another big deal was the takeover of a 36-hole golf course project in Cu Chi District, HCM City, by CT Group from South Korea’s GS Engineering&Construction Company for US$24 million. The 200-ha course was renamed C.T Sphinx Golf Club&Residences.

Dau Tu reports that many other M&A deals were understood to have taken place but no information was available.

Challenges ahead

VietinBank Capital of VietinBank acquired 80.06 per cent of PV-Inconess (PVIC) to buy the Royal Golf Club, near Tam Diep town, Ninh Binh Province, about 100km south of Ha Noi. The first 18 holes of the 54-hole course have been completed. No information on its value was disclosed.

Viet Nam is now home to around 32 golf courses, mostly located in HCM City, Ha Noi, Da Nang, Hai Phong and Quang Ninh.

Of the 28 18-hole golf courses under operation, 10 belong to foreign investors.

The Golf Viet Nam Association (VGA) said investment in golf courses cost at least $1 million, not including land rent and land compensation. Therefore, one 18-hole golf course needed at least 30,000 players a year to return its investment and 33,000 to collect a 10 per cent profit.

Of the 28 18-hole courses under operation, only 10 recouped their investment or generated a small amount of profit. Most kept going thanks to a number of annual membership cards which cost $1,200-2,000 a year. Many investors said they relied on other investments to subsidise their golf course investments.

Understandably, several golf course projects have been put on hold because of the depressed property market. Added to that, the local land rights limitation of 50 years tended to cap liquidity, which put a dampener on the sector as an investment.

It was difficult to make golf courses pay, said VGA deputy chairman Le Kien Thanh, who as it happened was forced to sell an 18-hole golf course in northern Vinh Phuc Province.

He said golf courses needed to make at least VND140 million ($6,700) a day, which required 300 players a day, but his course had only 150 a day at the time of its sale in 2009.

The difficulties faced in the current economic climate, not to mention the money needed for maintenance and improvements and luxury infrastructure down the track, had caused foreign investors to withdraw from the sector, leaving openings for local investors