Real estate mergers and acquisitions are increasingly active

Experts say that despite the global economic downturn, Vietnam's performance remains stable, creating great appeal to foreign manufacturing investors.

By the end of October 2023, the total newly registered, adjusted and contributed capital to buy shares and purchase capital contributions by foreign investors in Vietnam reached more than 25.76 billion USD, an increase of 14.7% over the same period.

The real estate business sector remained in second place with a total investment capital of nearly 2.14 billion USD, accounting for more than 8.3% of total registered investment capital.

Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam, commented that the manufacturing, trade and service sectors will continue to be the driving force of Vietnam's economic growth while real estate mergers and acquisitions (M&A) activities are increasingly vibrant.

The State Bank of Vietnam's continued pursuit of reducing interest rates to 2020 levels is also a good sign for residential real estate.

Many foreign investors have begun to transfer capital into real estate projects in Vietnam in the form of share acquisitions. A few Vietnamese enterprises with strong financial potential have also joined the game, but the scale of the deals is only small and medium.

In the third quarter of 2023, the real estate market recorded a number of outstanding M&A transactions.

Notably, SkyWorld Development Berhad (Malaysia) purchased 2,060 square meters of land in District 8, Ho Chi Minh City from Thuan Thanh Joint Stock Company for 14.3 million USD to develop a residential real estate project.

In Ho Chi Minh City, another Malaysian enterprise, Gamuda Berhad, purchased 3.68 hectares of land in Thu Duc City from Tam Luc Real Estate JSC for approximately 315.8 million USD to develop a multi-purpose project.

Saigonres Group (Vietnam) has carried out M&A procedures to purchase 90% of shares of Duc Nhi Joint Stock Company and become the owner of a 7,700m2 land plot in Tan Phu district, Ho Chi Minh City.

In the Hanoi market, there was a deal in which Keppel Group (Singapore) bought 65% of shares in a company holding commercial real estate assets with a total value of 50.4 million USD.

The Central market recorded the transaction in which First Real Land (Vietnam) Joint Stock Company purchased 22% of the charter capital of Bach Dang Trading and Service Joint Stock Company, the owner of a 6,879m2 land plot in Da Nang for 8.2 million USD.

Meanwhile, FIT Group (Vietnam) also officially withdrew capital from the Cap Padaran Mui Dinh beach resort project with an area of ​​800 hectares in Ninh Thuan province.

M&A activities in the third quarter of 2023 are assessed by experts to be quite vibrant with the participation of both foreign and domestic investors.

Commenting on the prospects of the residential segment, Neil MacGregor, Managing Director of Savills Vietnam, said that with the shortage of apartment supply, investors who are able to successfully develop new projects for the market will be able to take advantage of the strong demand at this time, especially if they target the growing middle-class homebuyers.

Savills experts in Vietnam commented that currently, prominent residential real estate investors such as Vingroup, Masterise Homes and Ecopark have launched many new products at the end of the year.

At the same time, the revised Housing Law, expected to be passed in the 6th Session of the 15th National Assembly, also eliminates the regulation requiring commercial housing projects to reserve 20% of land area for social housing.

This change is flexible and suitable to market practices and local needs; at the same time, it will help speed up progress for commercial housing project developers.

Similarly, in the office segment, experts cited that in Ho Chi Minh City, the performance of the office segment remains strong. Although the supply of new Grade A is quite abundant, there are still opportunities for investors and developers in this field.

Investors who can develop or upgrade office buildings with green standards can attract higher rents, Mr. Neil MacGregor analyzed.

Industrial real estate continues to be an attractive and motivating sector in real estate investment activities.

Since July, Sumitomo Corporation (Japan) has signed a Memorandum of Understanding with Thanh Hoa province to develop an industrial park with an area of ​​650 hectares and an investment capital of 400 million USD; at the same time, considering developing an industrial park with an area of ​​300 hectares in Nam Dinh.

At the end of August, three new projects of the Vietnam-Singapore Industrial Park (VSIP) began implementation; two projects received investment approval and 12 development cooperation agreements were signed.

Notably, a joint venture between Lineage Logistics and SK Logistics was announced to improve and expand Vietnam's cold storage system.

Meanwhile, Suntory Pepsico has received approval to build a new factory in Long An with a total investment of 185 million USD, while Hyosung Group plans to invest nearly 1 billion USD in a carbon fiber factory in Vung Tau…

Positive signs of FDI attraction and M&A show that investors are restoring confidence in the regional real estate market in general and Vietnam in particular, supported by the prospect of interest rates and a number of large transactions that are under thorough audit.