Why does Vinhomes sell large batches to other investors instead of selling each unit individually?

Why Vinhomes Sells Large Plots to Other Developers Instead of Individual Units?

Wholesale sales account for approximately 81% of Vinhomes' real estate revenue in the first half of the year, helping to collect payments earlier and share development risks with partners.

Instead of selling individual units to end buyers, Vinhomes (VHM) is accelerating large plot sales to other real estate developers. In the first half of this year, this approach contributed approximately 81% of total real estate sales and about 70% of the company's profit, according to Vietcap Securities estimates. Meanwhile, in the same period of 2025, retail sales represented 80% of revenue. This marks a notable shift in the sales structure of the market-leading real estate developer.

During a recent "Chat with Portfolio" show with Dragon Capital, Mr. Pham Anh Khoi, Chief Financial and Investment Officer of Vinhomes, stated that the wholesale and retail sales mix depends on the development cycle of each project. In the early stages, companies typically sell large plots or project components to capable domestic and international developers. As projects move into subsequent phases, the product mix and sales approach may change.

According to Mr. Khoi, selling large plots offers several benefits to developers. First, this approach enables the company to collect payments earlier, thereby reducing capital pressure during the project development process. Rather than having to independently manage the entire product lifecycle from construction to sales and handover to individual customers, the company can transfer a portion of the work to partners.

Wholesale sales also help share risks during the development process. For large-scale integrated urban developments, developers must mobilize significant resources for infrastructure, construction, and operational management. Selling sub-projects or large land plots to development partners helps distribute implementation responsibilities while enabling each party to target different customer segments.

In practice, the shift in sales structure has impacted profit margins. According to Vietcap Securities, Vinhomes' core real estate gross profit margin in Q2 reached approximately 74.9%, higher than the 54.1% in the previous quarter and 35.1% in the same period last year. The research team noted that the higher proportion of large plot transactions was among the factors contributing to this improvement.

Vinhomes stated that partner selection is based on implementation capability, financial strength, and domestic or international reputation. According to Mr. Khoi, partners may develop product lines that Vinhomes does not directly focus on, thereby supplementing the product mix for the entire urban development.

"Vinhomes is not just an ordinary real estate developer, but an urban development company with planning, meaning a master plan community builder," the company's CFO stated.

With this model, multiple partners participating in urban development is to be expected. Partners include not only secondary developers but also banks, investors, and customers within the company's ecosystem. This approach can be seen in large-scale urban developments such as Vinhomes Grand Park (Ho Chi Minh City), Smart City, and Ocean Park (Hanoi). Some components are developed jointly with partners—for example, the Komorebi sector at Vu Yen involves participation from Nomura.

However, specific cooperation models may vary in terms of product scope, development rights, and each party's responsibilities. Therefore, not every large plot sale equates to a full project transfer.

Although it can help collect payments earlier, large plot sales do not guarantee that the entire transaction value will be immediately recognized as revenue or profit. The timing of recognition depends on contract terms, implementation progress, and related accounting conditions. At the end of Q2, Vinhomes' unrecognized real estate sales contract value reached 196,813 billion VND, up 42% year-on-year. This represents the value already sold but not yet fully recognized as revenue according to handover progress or corresponding conditions.

However, the profitability of each transaction also depends on selling prices, land costs, infrastructure, construction, and contract terms. Therefore, it cannot be generalized that wholesale sales always yield higher profit margins than retail sales across all projects or phases.

Mr. Pham Anh Khoi, Chief Financial and Investment Officer of Vinhomes. Photo: Dragon Capital

The choice between wholesale sales and direct retail, essentially, is a question of capital and resource allocation. If selling individual units directly, companies may have greater control over products, selling prices, and project value realization timelines, but must also continue bearing implementation, sales costs, and absorption risks. Conversely, large plot sales can help collect payments earlier and reduce the workload the company must handle independently, but the company also shares a portion of the business opportunity with partners.

Mr. Khoi stated that Vinhomes evaluates capital deployment decisions based on the ability to create the best value for shareholders at each point in time. Resources may be directed toward project development, acquiring additional land banks, construction and product handover, or profit distribution, depending on specific conditions.

With strong sales growth in the first half of the year, large plot sales have helped Vinhomes accelerate the commercialization of large-scale projects. However, as Mr. Khoi explained, transactions with secondary developers tend to be more prevalent in the early stages, while retail sales typically increase as projects enter the active operating phase. Therefore, the high wholesale proportion in the first half of the year remains cyclical in nature, rather than marking a long-term shift in how Vinhomes allocates capital and develops products.

Tat Dat