Vietnam records $500 mln in real estate M&A in first half: JLL

The transaction value of real estate mergers & acquisitions in Vietnam totaled $500 million in the first half of this year, up 41.2% versus the same period of pre-pandemic 2019, according to Jones Lang LaSalle.

Real estate M&As in the country reached $1.5 billion in 2022, the highest figure since 2018, the real estate service company (JLL) noted.

The consultancy said Vietnam’s real estate market continued to attract foreign investors and investment funds despite temporary market downturn.

Between 2014 and 2018, most high-quality assets belonged to Vietnamese developers thanks to their well-established capabilities in land development, project execution and sales. This hindered the participation of foreign investors in developing new projects.

With drastic changes in the current market, local developers are prompted to restructure their products and portfolio, and are more motivated and open to opportunities to collaborate with foreign investors, JLL highlighted.

In the near term, more successful transactions are expected as financial constraint among local landowners persists. It is unlikely that the tightening financial situation of local developers will ease quickly, due to legal reforms in 2024 related to land and housing and the lingering global economic headwinds, JLL said. This will provide opportunities for foreign investors amid Vietnam’s solid long-term growth.

In June, Thailand’s real estate investment trust SHREIT sold three hotels representing 632 keys altogether in Ho Chi Minh City and Jakarta for a combined $106.1 million. The three hotels are the ibis Saigon South and Capri by Fraser in HCMC’s District 7, and the Pullman Jakarta Central Park. In particular, the two properties in HCMC were sold to the UK-based LT Rubicon for approximately $33 million, JLL said.

In May, Singapore’s conglomerate Keppel Corporation started a deal to acquire a 49% stake in two adjacent residential projects in HCMC from Vietnamese property developer Khang Dien for VND3.18 trillion ($135.42 million). Keppel completed the acquisition in August.

In January, Hong Kong-based real estate giant ESR acquired a “strategic” equity stake in its Vietnam partner BW Industrial, as part of a funding round that could raise up to $450 million for the major industrial developer. ESR said that it was in the progress of purchasing over 168 million newly issued BW shares, or 10.89% of the issued charter capital in BW, for a total of less than $207.8 million. ESR may elect to subscribe to additional shares following that acquisition that will give it no less than 15% shareholding in BW post-investment.

In July, Gamuda Land, the property arm of Malaysia’s Gamuda Berhad, said it would spend VND7.2 trillion ($315.8 million) to acquire 100% of equity in Vietnam’s Tam Luc Real Estate Corporation. With the transaction, Gamuda will acquire a 3.6-hectare project solely owned by the Vietnamese firm. The site, which will serve both commercial and residential purposes, is located in Ho Chi Minh City’s Thu Duc city.