Real estate project acquisition is bustling again

Since the beginning of the year, about 11 real estate mergers and acquisitions (M&A) deals have been successfully transacted. Of which, the total value of 9 out of 11 deals reached over1.8 billion USD,Focus on housing, industrial real estate and logistics segments.

In early October, Keppel Land (Singapore) announced that it would sell 70% of its capital in Saigon Sports City Company Limited, the unit that holds the right to develop a 64-hectare project in Ho Chi Minh City - one of the largest economic locomotive complexes. The buyers are two Vietnamese enterprises (HTV Dai Phuoc Company Limited and Vinobly Real Estate Investment), the expected value of the transaction is over VND7,400 billion.

Two months ago, KIDO Group also completed the purchase of 75% of shares of Hung Vuong Joint Stock Company, the unit that manages and operates Hung Vuong Plaza Trade Center.

In the housing segment, in June, Kim Oanh Group cooperated with three Japanese partners to implement the One World urban area project of nearly 50 hectares, with an investment capital of more than one billion USD. Of which, three Japanese companies hold 49% of the project's investment capital, while Kim Oanh Group holds 51% of the shares.

In the resort and hotel real estate segment, in August, Hoan Sinh Gia Lai Investment Company Limited completed the transfer of a hotel in Pleiku to Muong Thanh Group. This hotel used to be owned by Mr. Doan Nguyen Duc's Hoang Anh Gia Lai Company. This hotel is located in the center of Pleiku City, operating since the end of 2005. The value of this deal has not been disclosed.

Earlier this year, Van Phu Invest Joint Stock Company also transferred all its capital at Hung Son Company to Hung Phu Real Estate Investment Company Limited, worth nearly 1 million USD. Hung Son Company is the investor of the Vlasta - Sam Son Urban and Resort Complex project with a scale of more than 25 hectares, located in Sam Son City, Thanh Hoa.

The Vietnam Association of Realtors (VARS) assessed that the trend of shifting strategies from outright buying and selling to "contributing rice to cook rice together" is flourishing. "The average value of successful transactions in the first 9 months reached the highest level in the past 6 years and doubled that of last year," VARS said.

Mr. David Jackson, General Director of Avison Young Vietnam, acknowledged that in the context of the real estate market gradually recovering, investors and real estate developers all want to gain momentum to enter the next 10-year development cycle. Therefore, they are actively planning to expand investment and increase their market share in Vietnam.

He said that in the past, investors were only interested in and required that the project complete legal procedures and have a construction permit. Now that three new laws related to real estate (Land Law 2024, Housing and Real Estate Business Law 2023) have gradually removed legal issues, they tend to reduce expectations and "loosen" requirements, mainly focusing on 1/500 planning, investor reputation and project potential.

According to experts, depending on the capacity and performance of the project, investors tend to "reserve" (not or do not want to sell) or are willing to negotiate and seek cooperation opportunities through M&A. The buyers are still the group of investors in the North Asian region, who are familiar with the Vietnamese market, such as Singapore, Korea, Hong Kong, Taiwan, and Japan.

According to MB Securities Company (MBS), the financial health of some real estate businesses is still weak and they have not been able to access capital, while project development costs are increasing. Therefore, selling projects to investors with financial potential and capacity will help them maintain operations. This unit believes that M&A of real estate projects is an important part of the market in the second half of this year.

In the coming time, experts predict that the demand for M&A will still be concentrated in the housing, industrial real estate and logistics segments. This activity will be more vibrant with the support of the legal corridor and the motivation from large infrastructure projects (such as the North-South Expressway, Long Thanh Airport) and new industrial parks.

Real estate services firm Cushman & Wakefield said that the 2024-2026 period could see a large amount of foreign capital pouring into the real estate market. The investment goal is still to find clean, good quality land with complete legal documents and development potential. However, administrative and legal procedures and land scarcity are still major barriers for foreign investors when coming to Vietnam.