JLL: Real estate M&As more virbrant

Vietnam’s vibrant real estate market will elevate the number of merger and acquisition (M&A) deals to a new record this year, according to Mr. Stephen Wyatt, Regional Director of JLL. 


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“Growth in M&As in Vietnam is accelerating partly because of its continued global integration, socio-political and macroeconomic stability, as well as structural reform in banking and finance, public investment, and State-owned enterprises,” he said. 

Foreign investment in real estate ranked fifth in the first half of the year, with total investment capital of $700 million, up 16 per cent year-on-year, with 39 newly-registered projects worth $500 million.

Vietnam’s real estate market continues to have irresistible appeal to foreign investors, mostly through M&As. Joint ventures have become popular, with foreign developers who have strong financial capacity and track record joining forces with local developers who own land and have strong connections with the local community.

JLL observed that there are hundreds of millions of dollars waiting to be poured into the market in most segments, including residential, office, retail, hospitality, and industrial. Investors are from many different countries, such as Japan, South Korea, and Singapore, with an increasing number of groups from mainland China, including CFLD, Country Garden, Jiayuan, and others.

Japanese investors are interested in increasing their presence in Vietnam. Last September, Kajima, one of the four largest contractors in Japan, set up a joint venture with Indochina Capital to invest $1 billion over ten years. The primary focus will be on residential and hospitality projects in Hanoi, Ho Chi Minh City, and Da Nang.

“We expect Japanese investors will be one of the most active groups in the market this year,” said Mr. Wyatt. “Their main focus is residential and operating assets such as serviced apartments and Grade A office space.”

There have been several notable transactions in the industry since the beginning of this year. In March, Singaporean company Keppel Land acquired the remaining stake (16 per cent) of the Southern Waterborne Transport Corporation (Sowatco) in Saigon Centre through subsidiary Krystal Investment Pte., Ltd. Hongkong Land will become a potential strategic partner with the Ho Chi Minh City Infrastructure JSC (CII) in developing residential housing in the Thu Thiem New Urban Area.

In May, Quoc Cuong Gia Lai sold its project in Ho Chi Minh City’s Nha Be district to Sunny Island Investment for an undisclosed sum. 

Recently, Phat Dat Corporation announced it has transferred part of its Everrich 3 project in Ho Chi Minh City. Hung Thinh Real Estate has its own strategy to purchase 20 long-delayed projects, ten of which have seen construction or sales begin.

In addition, the VinaCapital Vietnam Opportunity Fund Limited announced it has divested its 70 per cent stake in the 198.5 ha-Dai Phuoc Lotus real estate project, a residential-township development located in Dong Nai province, to China Fortune Land Development (CFLD). 

CFLD has also signed an MoU with the Tin Nghia Corporation to build a New Industry City (NIC) at the Ong Keo Industrial Park, aligning with its plan to build dozens of industrial cities around Southeast Asia. Other Chinese developers are considering real estate projects in Vietnam, according to JLL.

There are more foreign investors entering Vietnam and opening new offices. These investors were on a fly-in fly-out basis in their first investment, while now, for subsequent investments, they have set up local teams comprising a combination of local and expat operators. 

“Due to the strong focus on Vietnam from regional investors, we expect M&A activities to reach record levels in 2017 and 2018,” Mr. Wyatt said.

VN Economic Times



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