A real estate company temporarily ceased operations due to lack of money.

PVR Hanoi Investment Joint Stock Company (PVR) - a real estate company listed on UPCOM (a stock exchange for companies not listed on the stock exchange) - will temporarily suspend business operations from November 15, 2023 to November 14, 2024.

Temporarily closed due to lack of money

PVR Hanoi Company said it has just received a certificate from the Hanoi Department of Planning and Investment on the temporary suspension of business for one year. The reason is for the company to rearrange its personnel and find a new business direction.

On October 31, PVR’s board of directors issued a decision to temporarily suspend business operations, citing the freezing of bank accounts by court order and the company’s lack of funds to maintain operations in 2023. It is expected that the company will still have no operating funds in 2024.

The suspension is a time for the company to consider finding solutions and directions for the company to have financial resources to operate again.

PVR's business situation is quite difficult, from 2022 until now, it has not recorded any revenue. The small profit comes from the reversal of provisions when investing in securities.

In the financial report for the third quarter of 2023, the revenue section is blank. While still having to pay financial and business management costs, PVR lost 77 million VND in the third quarter. The accumulated loss as of September 30, 2023 was nearly 79 billion VND.

In PVR's 2022 financial report, the auditor noted some of PVR's investments in Petroleum Construction Joint Stock Company (VND21.35 billion) and Lam Kinh Petroleum Hotel Joint Stock Company (VND5 billion). In addition, PVR is also at risk when the Tan Vien international tourist area project is revoked.

Some other businesses are in the process of dissolution, when will real estate recover?

The difficulties of the general market make it difficult for large enterprises such as Dat Xanh Group (DXG) to be an exception. DXG's Q3-2023 financial report records an organizational structure of 86 subsidiaries. However, many of these companies are undergoing dissolution procedures such as Eastern Real Estate Joint Stock Company, Southeast Real Estate Investment and Trading Joint Stock Company, Dat Xanh Finance Company Limited, Binh Phuoc Real Estate Investment and Trading Joint Stock Company, Diamond Tower Investment Joint Stock Company, Ruby Tower, Sapphire Tower, Emerald Tower.

In the first 9 months of this year, Dat Xanh's net revenue reached VND 2,305 billion, down nearly 50% compared to the same period in 2022. DXG reported a 9-month profit after tax of more than VND 149 billion, down 84%.

According to the explanation of Dat Xanh's leaders, the decrease in profits mainly came from the real estate brokerage service segment. However, after the prolonged difficulties of the market since the end of 2022, Dat Xanh's real estate brokerage service segment has just begun to recover in the third quarter of 2023.

In the newly released Q3/2023 report, the Vietnam Association of Realtors (VARS) also said that the health of real estate businesses has shown signs of improvement, but not completely and widely.

About 107 real estate businesses leave the market each month. Many places are struggling to survive, operating with only a few core staff, "living on the belief" that the market will recover by the end of 2023, according to VARS.

According to a recent survey by VARS of its members, 60% of respondents said their customers would invest in real estate if interest rates continued to fall.

According to VARS, the total transaction volume in the market is gradually increasing. In the second quarter of 2023, the market recorded 3,700 transactions, an increase of 37% compared to 2,700 in the first quarter. By the third quarter, the market had recorded nearly 6,000 transactions, 1.5 times higher than in the second quarter and more than twice as high as in the first quarter of 2023.

However, in the first 9 months of 2023, the number of transactions was only about 50% compared to the same period and about 20% compared to the land fever period. VARS pointed out that the market still lacks social housing supply, affordable housing, prices are increasing continuously and there is no sign of stopping.