20 January 2012
VinaLand Limited (the "Company" or "VNL")
The Company announces that at close of business on 31 December 2011 its unaudited net asset value per share was USD1.20. The previous unaudited net asset value per share at 30 September 2011 was USD1.35
The macroeconomic conditions in Vietnam during Quarter 4 2011 in particular, high inflation and record high interest rates have resulted in illiquidity within the market which has significantly impacted business activity and investor sentiment within the property sector. Local (Vietnamese) investors and residential (home and apartment) buyers are finding it difficult to secure finance for development and purchasing homes and if they can secure finance the interest rates are high at approximately 20%. It has become more evident during November and December 2011 that developers (both foreign and local) who have large exposure to local finance are now beginning to experience some distress as sales revenues are not meeting finance and construction costs. VNL’s exposure to debt at Fund level remains at zero and only 13% at project portfolio level which is very low. The continued slowing of transactions within the property market are now being reflected in the revaluations of land and development projects. VNL negotiations during November and December with prospective investors seeking to acquire projects have been protracted and in some cases have stopped as market instability has increased risk and reduced the confidence of investors. While the forecast for the Vietnamese macroeconomic conditions in 2012 is steady improvement, it is anticipated that the flow through to the property sector will involve a lag period. Foreign investment into the Vietnam property sector in 2012 will be affected by the global economic instability.
As part of the normal ongoing VNL Fund project revaluation program for NAV reporting, during November 2011 the Manager engaged external third party valuation consultants to appraise nine projects as at 31st December 2011 which resulted in a decrease of NAV. Additionally, a further review and adjustment of the remaining VNL portfolio was also undertaken by the Valuation Committee to reflect the impact attributable to the continued deterioration in the market conditions both locally (and globally). Both revaluation exercises have resulted in an unaudited downward adjustment to the VNL NAV per share of USD0.15.
About the Company:
VinaLand Ltd ("VNL") is a closed-end fund trading on the AIM Market of the London Stock Exchange. The fund focuses on key growth segments within Vietnam’s emerging real estate market, including residential, office, retail, hospitality and township (large-scale) projects. The manager’s objective is to provide shareholders a potential capital growth. The fund is managed by VinaCapital Investment Management, with VinaCapital Real Estate acting as development adviser. More information is available at www.vinacapital.com/vnl.
VinaCapital Investment Management Limited
+84 8 821 9930
Grant Thornton Corporate Finance, Nominated Adviser
+44 (0)20 7383 5100
LCF Edmond de Rothschild Securities, Broker
+44 (0)20 7845 5960
David Benda / Hugh Jonathan
Numis Securities Limited, Broker
+44 (0)20 7260 1000
FTI Consulting, Public Relations (Hong Kong)
+852 3716 9802