Foreign Investors Hold Strong Presence in Vietnam's Real Estate M&A Market
Investors from Singapore, South Korea, Taiwan, Japan, and Malaysia have injected approximately $1.4 billion into mergers and acquisitions (M&A) within Vietnam’s real estate sector during the first seven months of this year. However, the overall M&A market value in Vietnam has experienced a decline of 62% compared to the same period last year, reaching around $3.2 billion, as reported by Dao Thien Huong, Deputy General Director of EY Consulting Vietnam JSC.
Huong further highlighted that foreign investors, primarily from Taiwan, Singapore, and South Korea, account for 92% of the buyers involved in M&A deals within Vietnam’s real estate market. Notably, the largest deal in the real estate sector was the investment of $450 million by ESR Group Limited, one of the leading asset management companies in the Asia-Pacific region, to increase its ownership in BW Industrial Development Joint Stock Company (BW Industrial) in January 2023. This deal stood out as a significant transaction in the industrial property segment.
In the housing and urban area segment, Gamuda acquired a 3.68-hectare project in Ho Chi Minh City’s Thu Duc city for $305 million in early July, marking the largest deal in this particular market segment. Other notable transactions included Keppel Corporation’s acquisition of an 11.8-hectare project from Khang Dien for $277 million and the purchase of a retail project in downtown Hanoi for approximately $80 million.
Despite the ongoing negotiations for several M&A deals in the real estate sector, the process has been challenging due to difficulties in the legal framework concerning foreign investors’ ownership of real estate in Vietnam. Lawyer Ngo Thi Van Quynh, Director of An Legal company, emphasized that the complex legal procedures are a major factor contributing to the slow progress of M&A deals, resulting in increased time and costs. However, Quynh expressed hope that from 2024 onwards, M&A projects within the real estate sector will become more vibrant and active.