HAGL general director Nguyen Van Su told the listed firm’s annual shareholder’s meeting in HCMC on Tuesday (14 April 2009)  that the corporation was preparing for developing several projects of apartments and offices for lease in HCMC’s District 7 this year.

The office buildings by Te Canal and the Incomex apartments are among the upcoming real estate projects to be developed by HAGL, which has expanded investment in various business scopes including wood processing, tourism, rubber growing and power generation.

Su said the prices of building materials and equipment had been 40-50% lower than in 2008 when prices soared. “There’s no better opportunity to invest in new projects than currently. We will save much investment and gain much profit in the initial period of investment.

“HAGL will have products for sale on the market and will surely gain much profit upon economic recovery,” he said. HAGL chairman Doan Nguyen Duc told the Daily during the tea break of the annual shareholder’s meeting that the corporation had secured some VND2 trillion (more than US$112 million) to fund new projects in the real estate and other fields.

Duc clarified the over US$112 million was the profit of the apartments that HAGL sold recently. So, he said though the corporation had slashed prices of apartments by 30-40%, or from US$2,200 per square meter to US$1,250, it still gained profits.

Duc explained the subsidiaries of HAGL had supplied almost all construction materials and equipment for as well as developed these real estate projects. “This is our advantage.” Duc disclosed HAGL would continue to offer lower prices, at around US$900 per square meter around this June when the company started to sell apartments at the An Tien project under construction near the Te Canal and close to the Incomex project.

“This will be the lowest price that we have ever offered to the market,” Duc told the Daily. He furthered the An Tien project comprised 1,000 apartments and required investment capital of around VND800 billion (US$45 million). Duc said HAGL would lower prices to attract buyers. “The demand is there, and the point is how we can offer proper prices.” He said HAGL did not have any plan to build apartments for low-income earners and that the corporation wanted to build its brand as a leading developer of apartments for medium- and high-income buyers. “Our aim is to build 2.5 million square meters of apartments and offices for lease by 2012, and apartments for sale will account for 70% of the total space,” Duc said, adding that total revenue from this source was expected to exceed US$3 billion.

He disclosed real estate projects now contributed 85-90% of HAGL’s total revenue, but this proportion would make up for around 25% in the coming years when the company’s hefty investments in mining, power and rubber growing projects in Vietnam and Laos pay off.

HAGL expected to post pre-tax profits of VND1.15 trillion (nearly US$65 million), which is the lowest level the company has projected for the worst scenario of the real estate market, according to Duc. Last year, HAGL achieved pre-tax profits of just more than VND1 trillion compared to its target of VND2.5 trillion as the real estate market was frozen.

Duc said HAGL would commission two hydropower plants with a combined generation capacity of 42 megawatts by the end of this year and next. The company plans to break ground for the 80-MW Ba Thuoc 2 plant, and the 32-MW Daksrong 3 in June this year.