Berjaya Land Bhd’s Strategic Move in Vietnam

In a significant development for the Malaysian real estate sector, Berjaya Land Bhd (KL:BJLAND) has announced the sale of its 80% stake in a Vietnamese property development company, Berjaya-Handico12 Co Ltd (BHandico12), for RM201.96 million. This strategic divestment, completed in cash, marks a pivotal moment for the company as it seeks to optimize its portfolio and strengthen its financial position.

Details of the Transaction

The transaction involves the sale of BHandico12’s 80% stake to two Vietnamese entities: Dong Thinh Phat Land JSC and Green Hill Construction Investment JSC. BHandico12 is engaged in a mixed-use development project in Hanoi, known as Hanoi Garden City, spanning 78 acres in the Thach Ban district of Long Bien. This project underscores Berjaya Land’s commitment to creating sustainable and high-quality living spaces, aligning with its long-standing mission.

Financial Implications

The proceeds from this sale are earmarked for loan repayments and bolstering general working capital within the Berjaya Land Group. This move is expected to enhance the company’s liquidity and financial flexibility, allowing it to focus on core operations and future growth opportunities. Notably, the sale price represents a 32.5% premium over BHandico12’s net asset value as of March 31, 2025, indicating a favorable outcome for Berjaya Land.

Market Context

This transaction comes at a time when the Malaysian property market is navigating various challenges. Berjaya Land’s recent financial performance reflects broader industry trends, with the company’s share price closing at 0.3 MYR on June 10, 2025, down from a 52-week high of 0.445 MYR. The company’s market capitalization stands at approximately 1.5 billion MYR, with a negative price-to-earnings ratio of -8.97, highlighting the need for strategic adjustments.

Industry Outlook

The sale of BHandico12 is part of a broader trend among Malaysian companies to streamline operations and focus on core competencies. This is evident from the recent FTSE4Good Index review, which saw the addition of 19 new companies, including Berjaya Land, reflecting their commitment to strong environmental, social, and governance (ESG) practices.

Conclusion

Berjaya Land’s divestment in Vietnam is a strategic step towards financial stability and operational efficiency. By reallocating resources and focusing on its core strengths, the company aims to navigate the current market challenges and continue its legacy of providing innovative and sustainable living solutions. As the real estate landscape evolves, Berjaya Land’s proactive approach positions it well for future growth and success.