The competitiveness of Vietnam's real estate market is evidenced by increasing M&A activities and FDI, Savills' latest market review notes.
The trend towards merger and acquisitions (M&A) in Vietnam’s real estate market continues unabated, with the frequency seen in 2016 to be maintained this year, according to Savills’ latest M&A review.
The local real estate market has seen a host of strategic moves by investors in recent times, including M&As and development cooperation. Typical deals include Gaw Capital’s acquisition of a series of high-value commercial properties from Indochina Land and Gamuda Land purchasing stakes held by local investors in the Celadon City project.
At the same time, the market for M&A deals has been widespread in all segments, such as the joint venture between Chow Tai Fook and SunCity in the Hoiana resort and casino project in central Quang Nam province, with total investment of $4 billion, and Lotte’s acquisition of Diamond Plaza.
Savills has successfully consulted two major deals in Ho Chi Minh City. Though domestic investors have not attracted much attention compared to foreign investors, they play an important role in merger deals and development cooperation when they contribute market knowledge and experience in product development.
Van Thinh Phat, VinGroup, Novaland, Sun Group, and a number of developers are also revealing themselves as strategic investors with long-term vision, by acquiring projects or land sites with potential and releasing products to the market that compete with those of foreign investors.
A series of moves have been made by foreign investors, especially those from Japan, Hong Kong, South Korea and Singapore. For example, an anonymous Japanese investor acquired 70 per cent of A&B Tower in Ho Chi Minh City’s District 1 while the Creed Group, in association with two domestic investors, including Phat Dat and An Gia, has developed commercial housing projects.
Singaporean investors are no less prominent in the market, with Keppel Land’s participation in the Empire City project and CapitaLand increasing its ownership in The Vista project, while the most recent prominent deal was Mapletree acquiring the entire Kumho Asiana Plaza complex, one of the most prestigious sites in Ho Chi Minh City.
In general, the exciting M&A activities in Vietnam’s real estate market from large to small scale are clear evidence of credibility in growth momentum and a newly-sustainable development cycle, Savills noted in its report.
With a view of Vietnam possessing many opportunities and potential, M&As will continue to be a form that the vast majority of investors will use to enter the market and realize their goals.