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ECONOMYREAL ESTATE

M&A deals in real estate projected to rise next year

Updated at Sunday, 24 Dec 2017, 18:28
The Hanoitimes - Merger and acquisition (M&A) deals in Vietnam’s real estate sector are projected to increase next year thanks to the market’s significant potential, experts said.
Dang Xuan Minh, general director of AVM Vietnam & Vietnam M&A Forum, said the domestic property market was embarking on a second wave of M&A, after 2015, which would be fuelled by the hastened privatization of state-owned enterprises and the increasing interests of foreign investors.
The M&A market was expected to touch US$8 billion this year, of which the value of property deals accounted for the largest part, Minh said, adding average value was some $50-60 million per deal.
M&A deals in the real estate sector were estimated at some $2 billion this year.
M&A deals in the real estate sector were estimated at some $2 billion this year.
M&A deals in the real estate sector were estimated at some $2 billion this year.
According to Phan Xuan Can, chairman of property consultancy firm Sohovietnam, the announced M&A deals in the real estate sector were just the tip of the iceberg, and many deals were not disclosed.
Can estimated that the value of announced M&A deals in the real estate sector accounted for just 20-30 per cent of the real value.
In 2018, many mega deals were expected to take place, mainly in the segments of apartment, office, tourism property and urban land, Can said.
According to Pham Thanh Hung, the rapid international integration of Vietnam will have significant impact on the real estate market.
Hung said the property market is attracting foreign investors, adding that there was an increasing wave of investment in Vietnam’s property market from Japan, Korea, Singapore and China, as well as Germany and the United Kingdom, especially in the high-end segments.
Duong Thuy Dung, director of Research and Consulting, CBRE Vietnam, said M&A in the real estate market was also fuelled by the improvement in market transparency and simplification of procedures. The M&A trend would continue in the future and this would infuse fresh capital into the market.
Statistics of batdongsan.com.vn which had an average 50 million page views per month, showed there were a large number of online searches related to Vietnam’s property market in the apartment and villa segments in Hanoi and Ho Chi Minh City from Singapore, the United States, Japan, South Korea and Australia.
According to Jones Lang LaSalle (JLL), Vietnam has become an attractive destination for many foreign investors, largely due to the country’s friendly policies encouraging foreign direct investment (FDI), its political stability, and its strong economy.
The level of FDI has continued to grow year-on-year due to Vietnam’s strong fundamentals, with newly-registered FDI hitting a 10-year high of $35 billion and actual inflow of $17 billion this year. Vietnam remains one of the most favorable destinations for foreign investment in Southeast Asia.
Due to the strong focus on Vietnam from regional investors, JLL expects M&A activities to reach record levels in 2017 and 2018.
The country’s real estate market continues to have irresistible appeal to foreign investors, mostly through M&As. Joint ventures have also become popular, with foreign developers possessing strong financial capacity and a solid track record joining forces with local developers that own land and have strong connections with the local community.
​Phuong Thao
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