Banks put foreclosed beachfront properties worth dozens of millions of dollars on sale

By Quynh Trang   August 14, 2023 | 12:00 am PT
Banks put foreclosed beachfront properties worth dozens of millions of dollars on sale
Beachfront resorts, hotels and condotels in Da Nang city. Photo by VnExpress/Kim Lien
Banks are trying to sell foreclosed beachfront resorts, hotels, condotels, villas, and shophouses in a number of coastal localities.

In the first half of August, Agribank foreclosed some housing units at the Royal Marina Center, which has hotels, condotels, and resorts in a prime location in Nha Trang City in Khanh Hoa Province.

Its developer, Marina Hotel Joint Stock Company, owes money to the bank and also VietinBank.

Agribank has put on sale housing units at a starting price of VND1.1 trillion (US$46.6 million).

VietinBank is also trying to sell some housing units at the project to recover VND540 billion it is owed by Marina Hotel.

Agribank is foreclosing assets worth nearly VND500 billion mortgaged by seven other companies. They include resorts, hotels, condotels, villas and shophouses, in Phu Quoc island, southern Kien Giang province.

Agribank is also preparing to auction nearly 20 foreclosed properties, mostly land plots and mini hotels in Hoi An in the central Quang Nam Province.

Also in Hoi An, a month ago VietinBank offered for sale nearly 60 properties, mainly hotels, villas and homestays.

They included two four-star hotels with 98 and 104 rooms, both at a reserve price of VND420 billion.

VietinBank has foreclosed a number of four- and five-star hotels, homestays and villas in Nha Trang, the central Da Nang city and other places.

It is now trying to sell a five-star hotel with 236 rooms in Da Nang for VND600 billion.

Vietcombank is auctioning 30 foreclosed land plots in Phu My town in the southern Ba Ria Vung Tau Province with a starting price of over VND31 billion.

Experts said it is not easy for banks to sell big-ticket items amid the property market slump.

In the first two quarters of this year, few transactions were made for beachfront properties such as villas and shophouses.

According to real estate consultancy DKRA Group, the total inventory of coastal properties has increased to approximately 30,000 units.

Vo Hong Thang, Director of Consulting Services and Project Development at DKRA Group, acknowledged the inventory of townhouses and beachfront villas in the first two quarter of the year was at an alarming level.

Thang forecast the beachfront property market will not see significant positive signals until 2025 or later, and the overall real estate market will not revive in the coming months.

The dormant real estate market, according to Vietcombank Securities Company, will make it difficult for banks to deal with bad debts because real estate is the main collateral for most loans.

In the context of economic difficulties and the market’s low liquidity, the bad debt ratio of most banks increased in the first half of this year.

The bad debt ratio of Agribank rose from 1.81% at the beginning of the year to 2.09% at the end of June; that of Vietcombank from 0.68% to 0.82%; and that of BIDV from 1.12% to 1.57%...

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