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JLL: Real estate M&A to reach record levels in 2017 & 2018

Released at: 10:04, 11/07/2017

JLL: Real estate M&A to reach record levels in 2017 & 2018

Illustrative image (Source: cafef.vn)

Latest report from real estate consultants points to greater interest from regional investors in predicting record M&A transactions.

by Linh San

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, according to the latest report from JLL. 

A vibrant real estate market in 2017 will elevate the number of merger and acquisitions (M&As) to a new record. 

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

The level of FDI has continued to grow year-on-year due to Vietnam’s strong fundamentals, with newly-registered FDI at $19.2 billion in first half of the year, representing a rise of 54.8 per cent. Vietnam remains one of the most favorable destinations for foreign investment in Southeast Asia.
 
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. 
 
When looking at the market as a whole, JLL expects continued growth in most asset types. Hospitality has been interesting over the past year, it said, with new foreign capital specifically targeting the sector. 

JLL experts expect that this trend will continue in hospitality and in other growing sectors such as industrial and alternatives like education. The affordable housing market is another key growth sector, now drawing specialist capital sources that identify value in the country’s underlying fundamentals, including its growing middle class.
 
Due to the strong focus on Vietnam from regional investors, JLL expects M&A activities to reach record levels in 2017 and 2018.

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