M&As pick up pace in Vietnam property market

By Thuy Van
Wed, July 12, 2023 | 3:02 pm GMT+7

Vietnam’s ailing real estate market is witnessing a rising number of merger and acquisition (M&A) deals, mostly with overseas buyers who can arrange capital sources to counter the credit crunch in the country.

“Foreign institutional investors are still keeping a close eye on the Vietnamese property market, and we’ve received lots of inquiries from them,” Trang Bui, country manager of Cushman & Wakefield Vietnam, told a recent press briefing in HCMC.

“The credibility of foreign investors in the market still exists,” she said, noting the fact that Vietnam is growing into a new global manufacturing hub with the presence of leading multinational corporations.

The ailing market is expected to pick up next year and rally in 2025 as it becomes a more institutional investor market, according to Cushman & Wakefield, a prominent property services firm.

Cushman & Wakefield Vietnam has recorded some good signals in the licensing process for a number of projects but acknowledged that there are still many projects delayed in the legal approval process.

For more real estate investment activities to take place in the market, Vietnam needs to achieve a higher level of transparency and better urban planning, as well as a stronger legal framework to attract foreign investors, according to the company.

Singapore as capital source

Singapore’s Keppel Corporation announced on July 6 that Keppel Land Limited, through its wholly-owned subsidiary VN Prime Vietnam Company, is acquiring a 65% stake in a company to be incorporated (ProjectCo) which will hold a retail property in Hanoi. The project is part of a mixed-use commercial development, which is under construction and slated for completion in 2025.

The subsidiary, or VNPV, will make the deal for an aggregate consideration of approximately VND1.23 trillion ($52 million) subject to completion adjustments. The consideration will be payable in cash in two tranches. Vietnamese firm Binh Minh Investment and Trading Development JSC will hold the remaining 35% interest in ProjectCo.

Saigon Centre in HCMC’s District 1, a top-class commercial development owned by Keppel Land. Photo courtesy of the company.

Saigon Centre in HCMC’s District 1, a top-class commercial development owned by Keppel Land. Photo courtesy of the company.

In late May, Keppel Corporation said it had acquired a 49% stake in two adjacent residential projects in Ho Chi Minh City from Vietnamese property developer Khang Dien for VND3.18 trillion ($135.42 million).

According to Keppel’s announcement, the Vietnamese firm, listed on the Ho Chi Minh Stock Exchange (HoSE) as KDH, holds the remaining 51% interest and will develop the projects in Thu Duc city on HCMC’s outskirts with Keppel Corporation and Keppel Vietnam Fund, jointly known as the Keppel consortium. This marked the second joint investment by the consortium following the acquisition of three residential sites in Hanoi in 2022.

The acquisition price was S$159.7 million ($118 million). Keppel and its Vietnamese partner HCMC-based Phu Long planned to develop about 1,260 residences comprised of over 1,000 condominium units and more than 200 detached homes. The project is part of Mailand Hanoi City, a project now in the works that features residential properties, mixed-use complexes, schools, and hospitals.

Keppel Corp. is tapping emerging markets like Vietnam for growth as the country is gaining traction as a manufacturing hub for investors seeking to diversify from China in the “China plus one” trend to reduce concentration risks.

Keppel counts Singapore state investor Temasek as a major shareholder as Singapore-headquartered CapitaLand Group.

Real estate giant CapitaLand this July appointed the first head of sustainability for its recently privatized property development arm, CapitaLand Development (CLD). Taking on the role is Giovanni Cossu, an Italian national who joins the company from the National University of Singapore. He joins with a brief to boost CLD’s sustainability capabilities for its building and precinct projects, which have a combined portfolio value of S$22 billion ($16 billion), with a strategic focus on the Singapore, Vietnam, and China markets.

On June 5, Jonathan Yap became the new CEO at CLD. This March, CapitaLand showed an interest in acquiring some assets from Vietnam’s biggest listed property firm Vinhomes JSC, part of the country’s largest conglomerate Vingroup.

CapitaLand was in talks to acquire some assets worth roughly $1.5 billion from Vinhomes, Reuters said on March 17. A deal of that size would mark one of the largest real estate transactions in Southeast Asia in the last few years.

CLD said last July it was acquiring a mixed-use site of eight hectares in HCMC, Vietnam’s southern economic hub, to develop a project including over 1,100 high-end residential units and shophouses.

An artist's impression of CLD Vietnam's mixed-use project in Thu Duc city, HCMC. Photo courtesy of the company.

An artist's impression of CLD Vietnam's mixed-use project in Thu Duc city, HCMC. Photo courtesy of the company.

“We continue to expand in our core market Vietnam by securing another highly coveted site in Thu Duc of Ho Chi Minh City after our recent investment in Binh Duong and a memorandum of understanding with the government to invest in up-and-coming Bac Giang province,” CLD Vietnam CEO Ronald Tay said while announcing the deal.

A Singaporean firm completed its acquisition of major Ho Chi Minh City-based real estate developer Novaland’s F&B business (Nova F&B) this June.

VinaCapital, a leading investment management firm in Vietnam, acted as the broker for the deal, but the buyer’s name and transaction value could not be revealed under the contract.

Singapore-headquartered IN Holdings, which was not the buyer, is the new operator of Nova F&B, and the chain has been renamed IN Dining. Vietnamese businesswoman Nguyen Thanh Ha Ngoc was appointed legal representative and general director of IN Dining. She is also CEO of HCMC-based IN Hospitality JSC, which operates large convention and event centers including the GEM Center and White Palace in the southern economic hub.

Novaland’s divestment aimed at an intensified focus on its core business - real estate development. In February, Dallas Vietnam Gamma Ltd., one of Novaland's bondholders, agreed to exchange bonds for a stake in two Novaland subsidiaries - Thanh Nhon Real Estate and Mui Ne General Investment.

The transaction was worth VND1 trillion ($43.4 million). Dallas Vietnam Gamma is not a domestic company.

Sunrise City, a project developed by Novaland in District 7, Ho Chi Minh City. Photo courtesy of the company.

Sunrise City, a project developed by Novaland in District 7, Ho Chi Minh City. Photo courtesy of the company.

In mid-June, Dragon Capital, a leading fund manager in Vietnam, bought back 1,050,000 KDH shares in real estate firm Khang Dien to raise its ownership from 10.96% to 11.1%.

Khang Dien sold a 49% stake in two adjacent residential projects in HCMC to Keppel in late May.

HCMC-based Saigon Real Estate Corp. (Saigonres) signed a deal in early April under which it would transfer An Phu Riverview Apartments and An Phu Residences in Thu Duc to Saigon Riverside Investment Co. Ltd.

The two projects are estimated to cost more than VND900 billion ($38.2 million). If the transaction goes through, Saigonres would get around VND600-650 billion ($25.44 - 27.6 million) for the two projects.

Three-hotel deal

In mid-June, Thai real estate investment trust SHREIT sold three hotels representing 632 keys in HCMC and Indonesia’s Jakarta for $106.1 million.

In a filing with the Stock Exchange of Thailand, Strategic Property Investors, the manager of Strategic Hospitality Extendable Freehold and Leasehold Real Estate Investment Trust (SHREIT), identified the buyer as EverLand Opportunities IX Limited, a British Virgin Islands-incorporated company.

The transaction marked the first hotel portfolio sale in Southeast Asia for 2023, according to Jones Lang LaSalle (JLL), which acted as the exclusive adviser to the seller in the deal.

The three hotels were the Ibis Saigon South and Capri by Fraser in HCMC’s District 7, and the Pullman Jakarta Central Park. SHREIT’s hotel portfolio solely consists of the three hotels.

The four-star Capri by Fraser has 175 keys, and the three-star Ibis Saigon South has 140. Meanwhile, the Jakarta property has 317 rooms.

Comments (0)
  • Read More
Vietnam's Mekong Delta has immense opportunities for herbal-based medicine development: exec

Vietnam's Mekong Delta has immense opportunities for herbal-based medicine development: exec

The government should prioritize planning for designated growing areas and support product promotion to advance the development of products derived from medicinal herbs, said Pham Thi Xuan Huong, general director of OPC Pharmaceutical JSC.

Companies - Wed, December 18, 2024 | 2:15 pm GMT+7

Petrovietnam seeks WB support in offshore wind energy

Petrovietnam seeks WB support in offshore wind energy

State-owned Petrovietnam has called on the World Bank to provide support, including capital, to help with green energy projects, especially offshore wind power.

Energy - Wed, December 18, 2024 | 1:36 pm GMT+7

Masan High-Tech Materials exits its downstream business H.C. Starck

Masan High-Tech Materials exits its downstream business H.C. Starck

Vietnam's Masan High-Tech Materials on Wednesday announced the successful closing of the sale of 100% of H.C. Starck Holding (Germany) GmbH to Mitsubishi Materials Corporation Group.

Companies - Wed, December 18, 2024 | 1:24 pm GMT+7

New stock trading system KRX must come on stream in 2025: regulator

New stock trading system KRX must come on stream in 2025: regulator

The State Securities Commission (SSC) of Vietnam has demanded stock exchanges and related entities to launch the new stock trading system KRX in 2025.

Finance - Wed, December 18, 2024 | 11:40 am GMT+7

Hong Kong-invested battery maker GPPD raises Vietnam investment to $35 mln

Hong Kong-invested battery maker GPPD raises Vietnam investment to $35 mln

Singapore-incorporated GPPD Pte. Ltd., a subsidiary of Hong Kong-based Gold Peak Technology Group Limited, has increased its investment in Vietnam’s southern province of Binh Phuoc to $34.6 million.

Industries - Wed, December 18, 2024 | 11:17 am GMT+7

Vietnam interest rate unlikely to fall further: experts

Vietnam interest rate unlikely to fall further: experts

Interest rates in Vietnam are unlikely to decrease further and may even rise slightly in the near future, according to Pham The Anh, chief economist at the Vietnam Economic and Strategy Research Center (VESS).

Economy - Wed, December 18, 2024 | 10:04 am GMT+7

Vietnam an important partner of Guangdong-Hong Kong-Macao Greater Bay area: Sunwah Group chairman

Vietnam an important partner of Guangdong-Hong Kong-Macao Greater Bay area: Sunwah Group chairman

Through Hong Kong, an international financial center, Vietnamese businesses can more easily and effectively access the Guangdong-Hong Kong-Macao Greater Bay, says Sunwah Group chairman Jonathan Choi.

Economy - Wed, December 18, 2024 | 8:17 am GMT+7

Hanoi plans to start work on metro line 2 next year

Hanoi plans to start work on metro line 2 next year

Hanoi is set to start the construction of a section of its metro line 2 next year at a cost of VND35.58 trillion ($1.45 billion).

Infrastructure - Tue, December 17, 2024 | 9:15 pm GMT+7

Bamboo Capital highlights role of businesses in advancing Vietnam’s circular economy

Bamboo Capital highlights role of businesses in advancing Vietnam’s circular economy

Dr. Hoang Trung Thanh, a senior leader of Vietnam's conglomerate Bamboo Capital Group, emphasized the pivotal role of businesses in driving Vietnam’s green economy strategies during his speech at the recent Vietnam Circular Economy Forum 2024.

Bamboo Capital - Tue, December 17, 2024 | 8:15 pm GMT+7

F88 partners with MB to transform over 850 financial stores into bank transaction offices

F88 partners with MB to transform over 850 financial stores into bank transaction offices

Military Commercial Joint Stock Bank (MB) and leading consumer finance firm F88 on Monday officially signed a comprehensive cooperation agreement.

Companies - Tue, December 17, 2024 | 8:15 pm GMT+7

Vietnam’s e-commerce boom: a $5.8 bln opportunity by 2028

Vietnam’s e-commerce boom: a $5.8 bln opportunity by 2028

Vietnam’s business-to-consumer (B2C) e-commerce export value is estimated at VND145.2 trillion ($5.8 billion) by 2028, with micro, small and medium-sized enterprises (MSMEs) projected to contribute 25%.

Southeast Asia - Tue, December 17, 2024 | 7:32 pm GMT+7

Vietnam's retail giants to ensure sufficient supply, steady prices of Lunar New Year holiday goods

Vietnam's retail giants to ensure sufficient supply, steady prices of Lunar New Year holiday goods

Saigon Co.op has stockpiled more than 12,000 tons of essential goods traditionally consumed for the upcoming Lunar New Year (Tet) holiday in late January, or 30-50% higher than normal.

Southeast Asia - Tue, December 17, 2024 | 7:28 pm GMT+7

Indonesia offers tax incentive to hybrid car makers

Indonesia offers tax incentive to hybrid car makers

Indonesia will offer a sales tax incentive on Government-borne Luxury Goods (PPnBM DTP) of 3% for hybrid cars from next year.

Southeast Asia - Tue, December 17, 2024 | 7:21 pm GMT+7

Indonesia ready to establish bullion banks

Indonesia ready to establish bullion banks

Indonesia is ready to set up bullion banks after developing its capability to produce gold bars domestically, according to Minister of State-Owned Enterprises (SOEs) Erick Thohir.

Southeast Asia - Tue, December 17, 2024 | 7:19 pm GMT+7

Thailand, South Korea begin third round of Economic Partnership Agreement talks

Thailand, South Korea begin third round of Economic Partnership Agreement talks

Thailand and South Korea on Tuesday kicked off the third round of their talks for an Economic Partnership Agreement (EPA) aimed at broadening trade and investment exchanges, according to the latter's Ministry of Trade, Industry and Energy.

Southeast Asia - Tue, December 17, 2024 | 7:16 pm GMT+7

Thailand to spend nearly $9 billion to upgrade railway system

Thailand to spend nearly $9 billion to upgrade railway system

Thai Transport Minister Suriya Jungrungreangkit has announced a plan to accelerate work on the second phase of the country’s railway system upgrade next year.

Southeast Asia - Tue, December 17, 2024 | 7:14 pm GMT+7