Exciting real estate M&A market

4 min read

Many popular deals

In the first half of the year, the real estate market witnessed many exciting mergers and acquisitions (M&A) deals in land fund and corporate equity. Recently, Phat Dat Company (HoSE: PDR) announced to complete the purchase of 99.5% stake in Binh Duong Building Investment and Development Real Estate Joint Stock Company. Thereby, Phat Dat has the right to own and develop the Binh Duong Tower apartment project, Thuan An city, with an area of ​​4.5 hectares, about 20 km from Ho Chi Minh City.

Another deal is Tien Phat Garment Company, a member of TTC Land Group (HoSE: SCR) continuing to buy 11% of the capital of Long An Idico Construction Investment Joint Stock Company (UPCoM: LAI), thereby increasing its ownership to 40, 62%. Long An Idico is a construction real estate company, developing many projects with a total scale of 130 hectares in Long An.

An Gia (HoSE: AGG) also recently carried out an M&A deal for a 27-hectare project in Binh Chanh, Ho Chi Minh City. Mr. Nguyen Dinh Truong, director of the investment division of the company, said that the project plans to develop the project with a scale of 7,000 – 8,000 products of apartments and low-rise buildings. The company is completing the legal process, which is expected to bring the product to market in early 2022.

A project of An Gia in Binh Duong deployed after completing the M&A. Photo: AGG

Recently, novaland information (HoSE: NVL) is negotiating the transfer of a large-scale project in Ho Chi Minh City with a deal value of about VND 40,000 billion also attracted attention in the market. The source said it is expected that the profit can bring about VND 8,000 billion, the transaction is completed this year and paid in full in 2021 – 2022. The transfer partner was revealed to be a large real estate corporation in the North and a multidisciplinary economic group operating throughout the country, but based in Ho Chi Minh City.

For industrial real estate, Savills pointed to many new deals made this year. Typically, the Boustead Projects deal acquired a 49% stake in KTG Bac Ninh Industrial Development Joint Stock Company in Yen Phong Industrial Park for about $6.9 million. ESR Cayman Limited and BW Industrial Development Joint Stock Company (BW) announced the cooperation to establish a new joint venture with the goal of owning and jointly developing 240,000 m2 in My Phuoc 4 Industrial Park, Binh Duong.

Outlook for the last 6 months of the year

Right from the beginning of the year, many businesses have planned M&A with a deal value of billions of dong. An Gia plans to spend 3,000 – 5,000 billion VND to find land fund for projects in the next 3 years through M&A, prioritizing clean land fund, clear legality, fast implementation time. Nam Long (HoSE: NLG) is expected to spend about VND 2,000 billion per year on land fund expansion. The strategic locations that Nam Long targets in addition to the core segment in Ho Chi Minh City and the periphery, also promote in other cities such as Hanoi, Hai Phong, and Can Tho. Or like Novaland, which aims to add 10,000 hectares of land in the next 10 years, currently owns about 5,400 hectares.

Ms. Trang Bui, JLL’s Vietnam senior director, said that the real estate market is growing strongly in many areas. Despite being affected by Covid-19, M&A activities are still active, especially from large domestic investors. They focus on collecting land for future development, in many segments such as housing, residential areas, and commercial real estate.

For foreign investors, according to the representative of JLL, Vietnam is still a strategic market full of growth potential for investment items. Some funds and investors investing in Vietnam such as Keppel Land, Capital Land or Gamuda… are still committed to investing and looking for new items. Previously, they focused on investing mainly in the commercial and residential segments, but they are expanding through the industrial parks and logistics segments. JLL’s statistics show that about 4 billion USD of investment capital to develop factory and warehouse projects has been poured into Vietnam by foreign investors up to this point.

Ms. Trang forecasts that in the second half of the year, the industrial zones, warehouses and factories will continue to have large M&A deals. Trang also noted that one problem is that due to the impact of the epidemic with the policy of distancing and restricting travel, the implementation of M&A deals with foreign funds may take longer to complete because 3 – 6 months of negotiation as before.

Sharing the same view, Mr. Nguyen Hoang, Director of Research & Development (R&D) DKRA Vietnam assessed that M&A is a very active activity in recent years and brings many benefits to the real estate market. Previously, the market often saw foreign companies and organizations buying, selling and cooperating in projects, land funds or shares of Vietnamese enterprises. In recent years, many domestic enterprises have also emerged and acquired projects or shares of foreign enterprises.

In addition, Vietnamese businesses buying and selling/cooperating with each other also increasingly account for a significant increase in real estate M&A transactions. Along with that is the scale of the project, land fund, value of shares… also increasing; there are projects with a scale of hundreds of hectares, M&A values ​​up to trillions of dong. This shows the growth of Vietnamese enterprises as well as their careful, methodical, larger-scale and longer-term preparation for future development. Mr. Hoang believes that this is a trend that will continue to increase and develop in the coming time. M&A in real estate always accounts for the leading proportion in the general M&A market, which is very attractive.

Source: ndh.vn – Translated by fintel.vn