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M&A deals light up property market in first half of 2022

Since the beginning of the year, the real estate market has seen an uptick in merger and acquisition (M&A) activity, including office, residential, and industrial projects.

According to a Cushman & Wakefield (C&W) survey, the purchase of the Capital Place, a Grade A office building in the heart of Hanoi, by Viva Land from CapitaLand Development for US$550 million, heated up the office M&A market.

The high-class office project consists of two 37-story office towers, selected to house the main offices of many multinational corporations in the capital city.

Previously, Viva Land also successfully acquired Saigon One Tower and renamed it IFC One, Saigon.

The project, which is located at the heart of district 1 of Ho Chi Minh City, is designed as a commercial building including offices, apartments and a commercial centre with a total floor area of 124,100 square metres (sq.m).

For the housing segment, the market has also recorded a number of huge deals, such as Novaland's acquisition of the Kenton Node project from Tai Nguyen Construction Production Trading Co. and renaming it Grand Sentosa. This is a luxury apartment project with more than 1,640 apartments in Phuoc Kien commune, Nha Be district, HCM City.

Another noteworthy transaction is the purchase of the Saigon Binh An project, which is now known as The Global City, by Masterise Homes. The 117ha project is located next to the Saigon Sports City complex and the Long Thanh-Dau Giay highway.

Recently, the US investment fund Warburg Pincus announced an investment of US$250 million in Novaland to increase the land bank and develop Novaland's existing projects in strategic locations, taking advantage of the infrastructure that is gradually improving in the southern region.

Two other investment funds - VinaCapital and Dragon Capital - also poured US$103 million in Hung Thinh Land JSC, C&W’s survey showed.

Meanwhile, industrial real estate remains the hottest segment in the M&A market, accounting for 35% of the sector's total transaction value with numerous deals.

Early this year, GLP established GLP Vietnam Development Partners I with a total investment of US$1.1 billion in six logistics centre projects.

GLP is a top investment manager and business developer for facilities, digital infrastructure, renewable energy, and logistics.

In February, BW Industrial Development JSC - an industrial real estate developer co-founded by Warburg Pincus and Becamex IDC - acquired about 74,000sq.m of land in Bac Tien Phong Industrial Park in Quang Ninh province developed by DEEP C.

C&W Company said that a recent notable deal was the acquisition of a 49% stake in KTG & Boustead Logistics Industrial JSC in Yen Phong Industrial Park in Bac Ninh province by Boustead Projects Co., Ltd for US$6.9 million.

Trang Bui, head of Cushman & Wakefield, said that residential and industrial property will be the most attractive sectors for investors and developers from HCM City, Hanoi, and neighbouring provinces.

Besides traditional real estate types, in the past two quarters, an investment in data centre real estate was also announced by Gaw Capital Partners, a Hong Kong-based private investment firm, with a Tier 3 Data Centre project, built on a site of 6,056sq.m in the Sai Gon Hi-Tech Park of HCM City.

Experts said that despite the slowing growth rate of countries in the region, the Vietnamese economy grew at 7.72% in the second quarter of 2022, the highest level in 11 years.

Vietnam set a new record with US$10.06 billion in capital from foreign investors in the first half of 2022.

Leading foreign investors in the real estate market include Singapore, Japan, Denmark, China, and the Republic of Korea.

C&W also identified many existing problems related to the market, such as legal procedures. However, as the legal system is gradually improving in order to limit conflicts among regulations in the investment legal system, it will partly remove many existing barriers for M&A activities in the real estate market this year.

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