REAL ESTATE PROJECT DEVELOPMENT: WHY IS RESOLVING LEGAL BOTTLENECKS NOT ENOUGH TO UNLOCK CASH FLOW?

1. The Real Estate Market Is Entering a Phase of Restructuring Project Execution Capabilities

The implementation of the 2024 Land Law (Law No. 31/2024/QH15), together with the 2023 Housing Law and the 2023 Law on Real Estate Business, contributes to strengthening the legal framework governing land management and use, as well as real estate market development in Vietnam. In addition, Resolution No. 254/2025/QH15, dated December 11, 2025, issued by the National Assembly to provide mechanisms and policies for addressing difficulties and obstacles in implementing the Land Law and effective from January 1, 2026, establishes an additional legal basis for resolving certain issues arising during the law’s implementation. Its applicability must be determined in accordance with the specific provisions of the relevant legal instruments and the legal status of each project. (Official legal document)

However, completing legal procedures does not mean a project can immediately become operational. Even after planning or land-allocation issues have been resolved, many businesses still face financial obligations, funding shortages, and challenges in adapting their products to actual market demand. This demonstrates that resolving legal issues addresses only part of the recovery challenge. A project’s ability to move forward ultimately depends on execution capacity and effective cash flow management. These concerns are also discussed in the context of why resolving legal bottlenecks in real estate projects is not enough to restore the market.

As a result, the market is becoming increasingly differentiated. Businesses that primarily hold land banks but lack management expertise, financial resources, and execution capabilities may need to seek professional partners to advance their projects. By contrast, businesses capable of managing the investment process as a whole are better positioned to convert land assets into tangible commercial value.

2. Legal and Financial Changes Are Reshaping the Investment Landscape

2.1. The Evolving Legal Framework Requires More Thorough Due Diligence

The 2024 Land Law and its implementing regulations have introduced or adjusted provisions relating to land management, land valuation, and financial obligations. These include Decree No. 102/2024/ND-CP, which provides detailed regulations for implementing certain provisions of the Land Law; Decree No. 71/2024/ND-CP, which regulates land pricing; and Decree No. 103/2024/ND-CP, which governs land-use levies and land rents.

For projects facing prolonged delays or unresolved issues, businesses need to review their legal status, the origin and form of land use, planning documentation, completed procedures, and outstanding financial obligations. When considering the application of Resolution No. 254/2025/QH15, businesses must examine its scope, eligibility requirements, and related provisions rather than assuming that every delayed or stalled project qualifies for relief. Establishing the correct legal basis at the outset helps businesses develop implementation plans, estimate costs, and arrange financing in line with actual conditions.

In 2026, keeping up with regulatory changes and reviewing project documentation on a case-by-case basis is particularly important for real estate project development. Changes involving land prices, payments to the state budget, and transitional provisions should be incorporated into implementation plans from the beginning to minimize potential risks. Businesses can also review key legal updates concerning the implementation of the 2024 Land Law in 2026 to support their assessment of the requirements applicable to each project.

2.2. Land Costs Are Becoming a Major Variable in Total Investment Costs

Changes in land valuation mechanisms and financial obligations can significantly affect a project’s total investment cost (TIC). When land accounts for a larger share of the capital structure, projected profit margins may come under pressure, particularly for projects based on assumptions of high selling prices or rapid sales.

The extent of this impact depends on the land’s location, designated use, valuation methodology, legal status, and applicable transitional provisions. Businesses should therefore avoid applying a fixed land-cost ratio across all projects and instead develop financial scenarios tailored to each project’s circumstances.

Sensitivity analysis, break-even selling price calculations, and estimates of the investment payback period can help developers assess project feasibility more accurately. Changes in land prices and related financial obligations should be reflected regularly in investment plans to avoid relying on outdated assumptions.

2.3. Greater Data Transparency Is Changing Transaction Management

Efforts to integrate land databases, population data, and digital identification platforms such as VNeID create opportunities to improve transparency in land administration and real estate transactions.

However, the extent of data integration and the permitted uses of such information must be assessed in accordance with the relevant systems, regulations, and procedures. Digitalization should not be assumed to have completely eliminated property speculation or market manipulation.

For businesses, a key priority is to standardize information on legal status, project progress, product availability, and customer data. Consistent and well-managed information provides a more reliable basis for investment due diligence, risk control, and sales distribution.

3. Why Is Resolving Legal Issues Not Enough to Unlock Cash Flow?

3.1. Financial Obligations Can Create Liquidity Pressure Even After Legal Issues Are Resolved

Once legal obstacles have been removed, a project may enter a stage in which significant financial obligations become payable. If the business has not secured sufficient funding, completing the required procedures may still not enable construction to begin or resume on schedule.

Under Decree No. 103/2024/ND-CP, obligations relating to land-use levies and land rents must be determined on a case-by-case basis. The project owner needs to clarify the applicable calculation basis, the date on which each obligation arises, the payment deadline, and the amounts payable.

If a business focuses exclusively on resolving legal issues without preparing a corresponding financing plan, it may face a cash flow imbalance as soon as the project becomes eligible to proceed to the next stage.

Legal planning must therefore be coordinated with financial planning. Cash flow forecasts should account for mandatory payments, infrastructure investment, construction costs, and the expected timing of revenue generation. This provides a basis for determining actual capital requirements, engaging proactively with credit institutions, and reducing the risk of implementation delays.

3.2. A Valuable Land Bank Does Not Necessarily Translate into a Feasible Project

The strategy of accumulating land and waiting for its value to appreciate has created advantages for some businesses during favorable market cycles. However, as land costs, financing costs, and execution requirements become increasingly important, holding assets without generating economic value can place additional pressure on shareholders’ capital.

Even a well-located site may be unsuitable for development if total investment costs exceed what the market can support, the planning scheme is inefficient, or the payback period is too long.

Land-bank value should therefore be assessed on the basis of actual development potential rather than expectations of price appreciation alone. Key indicators—including total investment costs, break-even selling prices, market absorption rates, investment returns, and payback periods—should be evaluated together.

3.3. Poorly Positioned Products Can Stall Sales and Cash Flow

Market absorption is one of the key determinants of investment performance. As customers pay greater attention to selling prices, legal status, construction quality, and living costs, products that do not match actual demand may struggle to sell even when the project has completed the necessary legal procedures.

An apartment project may be well planned yet still experience weak sales if its unit sizes, layouts, amenities, or pricing do not match the income levels of its target customers. Similarly, a commercial property project can generate stable cash flow only if it meets the area’s actual operational needs.

This makes market research at the pre-feasibility stage essential. Rather than developing products based primarily on expectations of price appreciation, businesses need to identify target customers, understand their intended use, and establish price points that can sustain long-term market absorption.

4. Restructuring the Roles of Project Owners and Real Estate Developers

Under the traditional model, a single business often manages multiple stages of a project, from securing land and completing legal procedures to organizing construction and selling the finished products. This approach can provide greater control, but it also increases pressure on staffing, capital, and management capabilities, particularly when projects are large or market conditions become volatile.

Partnerships between project owners and professional real estate developers offer an alternative organizational model.

Project owners typically hold land-use rights or the relevant legal position in relation to the project and remain responsible for their obligations under applicable law. Meanwhile, real estate developers may undertake activities such as market research, product planning, design and construction coordination, financial structuring, project schedule management, and sales organization, as agreed between the parties.

A division of responsibilities does not mean that the project owner’s legal liabilities are automatically transferred to another party. The effectiveness of a partnership depends on the agreed scope of work, oversight mechanisms, the capabilities of each party, and the allocation of risks under the contract.

For landowners that lack the resources to implement their projects independently, partnering with an organization that has comprehensive development capabilities can provide additional expertise, improve capital utilization, and create greater consistency throughout implementation. By understanding the role of a real estate developer in integrating strategy, finance, construction, and commercialization, project owners can better assess which partnership model suits their project’s status and objectives.

5. The DBFS Model: Integrating Four Core Functions to Improve Project Development

To address legal, cost, schedule, and sales challenges simultaneously, the DBFS model (Develop – Build – Finance – Sales) treats a project as a closely interconnected sequence of activities. Rather than optimizing each stage in isolation, the model seeks to align development planning, construction delivery, capital structuring, and commercial strategy.

5.1. Develop – Research and Define the Project

The Develop stage focuses on market research, feasibility assessment, product positioning, planning reviews, and coordination in resolving legal issues. Its objective is to establish an appropriate development strategy before the business commits substantial investment.

Research should clarify target customer segments, purchasing power, competing products, and planning constraints. At the same time, legal documentation must be reviewed to determine implementation eligibility, outstanding risks, and procedural milestones that could affect the investment schedule.

5.2. Build – Manage Construction and Control Costs

The Build stage covers design coordination, contractor selection, schedule management, quality control, and construction cost optimization. Early coordination between design and construction teams helps minimize design changes, reduce the risk of delays, and support compliance with inspection and acceptance requirements.

In addition to budget control, the developer needs to monitor work quantities, material quality, contractual conditions, and risks affecting the construction schedule. Any technical adjustments should be assessed in terms of cost, functionality, and long-term operational performance.

5.3. Finance – Structure Capital and Manage Cash Flow

The Finance stage focuses on developing phased funding plans, forecasting cash flow, assessing leverage, and preparing appropriate financing options. The objective is to ensure that available resources are aligned with financial obligations, construction schedules, and the expected timing of revenue generation.

Financial plans should account for scenarios involving interest rates, sales velocity, unexpected costs, and the time required to complete legal procedures. For projects with substantial land-related financial obligations, securing funding before major payment milestones can reduce the risk of cash flow disruptions.

5.4. Sales – Distribution and Market Development

The Sales stage connects product positioning with marketing strategy, brand development, distribution, and customer care. Sales activities must comply with applicable legal requirements while remaining aligned with actual demand and the absorption capacity of each market segment.

Distribution strategies should be prepared early so that market feedback can inform product planning in a timely manner. However, launch schedules and the collection of funds from customers must comply with the legal conditions applicable to the relevant type of real estate product.

The coordination of these four components is central to Victory Group’s DBFS-based real estate project development process. When market research, design, construction management, finance, and sales are integrated from the outset, businesses can improve cost control, adjust schedules more proactively, and use capital more efficiently.

5.5. Conditions for Delivering Tangible Results Through DBFS

DBFS does not automatically guarantee a successful project. Its effectiveness depends on how the model is organized and implemented. Four conditions are particularly important:

• Clear coordination and accountability: Define the responsibilities of the project owner, developer, consultants, contractors, and distribution partners.

• Consistent data: Maintain a common management framework for legal documentation, progress, budgets, funding plans, and sales targets.

• Stage-by-stage risk management: Establish criteria for proceeding, adjusting, or suspending investment when the original assumptions no longer hold.

• Performance measured by actual outcomes: Evaluate progress, costs, product quality, cash flow, and market absorption rather than relying solely on the size of the land bank.

A real estate developer’s capabilities should therefore be assessed based on its ability to coordinate resources and execute the project, rather than solely on the size of its portfolio or experience in a single function.

6. Four Strategic Considerations Before Restarting a Project

6.1. Legal Readiness Must Be Matched by a Liquidity Plan

Before restarting a project, a business should prepare a consolidated overview of completed procedures, outstanding issues, anticipated financial obligations, and implementation milestones. This plan should be integrated with monthly or quarterly cash flow forecasts.

If available funding is insufficient to meet mandatory obligations, the business should consider options such as additional equity, investment partnerships, credit facilities, or restructuring the project’s scope, subject to applicable law.

6.2. Reassess Land-Asset Value and Investment Feasibility

Valuing a stalled project requires an assessment of its actual legal status, remaining development costs, outstanding financial obligations, time needed to complete the required procedures, and commercial potential. Unconfirmed assumptions about planning approvals or transitional mechanisms should not be treated as established advantages when conducting mergers and acquisitions (M&A) involving land assets.

Businesses should also test the sensitivity of their investment plans to changes in selling prices, construction costs, interest rates, and sales velocity. This approach helps reduce the risk of acquiring land at a price that fails to reflect the full range of development risks.

6.3. Develop Products Around Demand and Purchasing Power

Market research should identify target customer segments, income levels, intended uses, mortgage affordability, and competing products in the surrounding area. The findings should inform unit sizes, amenities, handover specifications, and pricing strategies.

For commercial projects and income-generating properties, indicators such as occupancy rates, operating revenue, management expenses, and net cash flow should be calculated during the investment planning stage.

6.4. Select a Developer Suited to the Project’s Scale and Complexity

Not every project requires the same partnership structure. Projects facing legal obstacles should prioritize expertise in document reviews and procedural coordination. Projects that are legally ready but lack funding should prioritize financial structuring capabilities. Projects struggling with sales may need stronger market research, product planning, and distribution expertise.

When selecting a partner, project owners should assess the candidate’s track record, implementation experience, management approach, ability to coordinate with relevant stakeholders, and mechanisms for allocating responsibilities. Commitments concerning funding, schedules, and sales performance should also be verified through specific contractual provisions rather than accepted solely on the basis of capability statements.

7. Outlook for Real Estate Project Development in Vietnam, 2026–2030

Between 2026 and 2030, the outlook for Vietnam’s real estate market will depend significantly on how effectively businesses adapt to legal requirements, investment costs, and market demand. The continued professionalization of the sector may encourage the growth of independent real estate development firms while creating more opportunities for partnerships between landowners and organizations with strong project execution capabilities.

This trend does not mean that every project owner must outsource all development activities. Instead, businesses need to select an organizational structure that fits their internal capabilities, project scale, and risk tolerance.

Project value will also increasingly depend on product quality, operational performance, suitability for end-user needs, and post-handover management. For income-generating real estate, operating efficiency and net cash flow will be important measures of asset value.

Against this backdrop, businesses lacking financial capacity, schedule management expertise, and market research capabilities may find it increasingly difficult to sustain their operations. By contrast, organizations that coordinate resources effectively, control costs, and adapt products to actual demand will be better positioned to improve investment performance.

Conclusion: Execution Capabilities Determine Real Estate Project Performance

Resolving legal bottlenecks is an important step toward getting real estate projects back on track, but it does not by itself guarantee that cash flow will recover. Project viability also depends on land-related financial obligations, capital structure, construction efficiency, product quality, and actual purchasing demand.

In an increasingly transparent and performance-driven business environment, real estate project development should be approached as an integrated process, beginning with pre-feasibility studies and extending toward sustainable commercial value creation.

The DBFS model offers a framework for connecting the four core functions—Develop, Build, Finance, and Sales—enabling project owners and developers to coordinate project management more effectively. However, the ultimate outcome still depends on the quality of due diligence, the capabilities of the parties involved, and their ability to translate plans into measurable results.

Rather than asking only when legal obstacles will be removed, businesses need to address a more fundamental question: once the legal issues have been resolved, does the project have sufficient resources, a marketable product, and an effective execution model to generate cash flow? Answering this question is essential to achieving a sustainable recovery in Vietnam’s real estate market in the years ahead.