ENGELINVEST GROUP – Press & Media

Massive Project for Yaakov Engel and Hezi Hermoni in Vietnam
To invest 1.1$ billion in constructing 9,000 housing units in Ho Chi Minh City (Saigon); equity required for the project stands at 130$ million
By Ariel Rosenberg

02.09.2008 Globes

Real-estate entrepreneur Yaakov Engel gains a new foothold and enters Vietnam. The private real-estate company Engelinvest, owned by Engel (72%) and run by Alon Avdani, signed three deals, under which it shall invest in three projects, overall constructing 9,000 housing units for Ho Chi Minh’s (Saigon) upper class. The projects will span 960,000 sq. m of construction, and commence in several stages.

During the first stage, 450$ million will be invested in building 400,000 sq. m of residential neighborhoods in the city, with an estimated overall revenue of 650 million dollars.

Engel informed Globes today that “the equity required for the projects is roughly 30%, so that Engelinvest’s and its partners’ equity stands at 135$ million. Engelinvest’s share stands at 80% of the necessary equity, over 100 million dollars”.

“It’s true that construction-approved land costs a bit more than agricultural land, but the entrepreneurs profit more over there. But the margins are big enough and the land is ripe for construction,” says Engel.

Two of the projects are to be founded in partnership with two subsidiaries of large local banks in Vietnam, and the third with a local entrepreneur.

Combination Deal
The deals signed with the banks entail an obligation by both banks to fund the projects and grant favorable mortgages to apartment buyers, which as Engel states “solve the financing issue”. All projects incorporate residence, as well as a small percentage of commercial zones. The first project is located in Zone 7 of the city, on 150,000 sq. m of land, to build 700,000 sq. m in 3 stages. During the first stage, 230,000 sq. m shall be built with an investment of 280$ million.

The project will be implemented with a combination deal of 12% with SACOMBank. The second project will be constructed on 26,000 sq. m of land intended for 115,000 sq. m of residence and commerce in the Binh Tan district with a total investment of 140$ million and revenues of 200$ million.

Engelinvest shall hold 80% of the project, and the remaining 20% shall be held by the partner VP Bank. A third deal has been signed with a local entrepreneur to purchase 15,000 sq. m with an investment of 55$ million during the first stage of constructing 50,000 sq. m with revenues of 90$ million. The partner shall continue holding 10% of the project.

In Engelinvest, Engel is partnered by Hezi Hermoni (22%), former Tadiran CEO, businessman David Brenner, company CEO Alon Avdani, and Ronen Hevroni, Venosa CEO, through which Engelinvest operates in Vietnam. Also partner is Yariv Landau, who has been operating in Vietnam for several years.

Engelinvest’s Vietnam operation joins the company’s Indian operation, which includes a large mall chain, hotels, several office towers and thousands of luxurious housing units meant for middle-upper class in India, spanning over 2 million sq. m.