Real estate market: big investors prefer M&A deals
The real estate market is facing difficulties because of both Covid-19 and legal problems. Businesses with powerful financial capability are now hunting for land and projects, reported Doanh Nhan Sai Gon.
Mitsubishi Corporation and Nomura Real Estate last January announced a deal to acquire 80 percent of shares of a project covering an area of 26 hectares in HCM City.
In March 2020, Sai Gon Real Estate JSC confirmed the acquisition of 20 percent of capital contribution to the housing project in the southern part of the Xuyen A Road from Real Estate 9 JSC.
Besides, the company is also planning buy more land plots, while hurrying up to wrap up the transfer of Gem Premium project in HCM City to Dat Xanh Group.
Most recently, at the annual shareholders’ meeting, LDG Group received 99.99 percent of shares of Hiep Phuc Real Estate JSC, becoming the investor of Song Da Riverside in Thuc Duc district, an apartment complex.
A ‘blockbuster’ deal was made in June: a group of investors headed by KKR, including Temasek, invested VND15.1 trillion, or $650 million, in Vinhomes to acquire 6 percent of shares.
After the deal, Vingroup remains the controlling stakeholder in Vinhomes. KKR made the deal through Asian Fund III.
The real estate market in other provinces has heated up with a series of M&A deals. Hung Thinh Group has wrapped up an M&A to acquire a 1,000 hectare land plot in Lam Dong province.
|The real estate market is facing difficulties because of both Covid-19 and legal problems. Businesses with powerful financial capability are now hunting for land and projects.|
Prior to that, the realtor spent trillions of dong to buy a series of projects in Quy Nhon City in Binh Dinh province, including one project in Nhon Hoi covering an area of 1,000 hectares.
Danh Khoi Group is following a deal of acquiring ‘golden land’ in Da Nang City. Meanwhile, Danh Viet Group is negotiating for buying an apartment project in Binh Duong province.
Analysts said the M&A real estate market is bustling because there are many sellers and buyers.
The State Bank of Vietnam’s Circular 22/2019 on funding real estate projects which took effect in early 2020 has caused a capital shortage for real estate developers. Realtors find it difficult to sell products because of low demand in Covid-19. Therefore, investors with limited financial capability tend to sell their projects or seek partners to develop projects.
Nguyen Hoai An from CBRE Vietnam said the real estate market grew slowly in the first months of 2020, but foreign investors are still seeking opportunities with M&As.
Many individual investors and investment funds seek offices, small- and medium-size hotels, resorts, and townhouse projects capitalized at around VND8-10 trillion.
Translated by Le Ha
As bank deposit interest rates are on the decrease and gold is becoming more and more expensive, idle money is expected to flow into the real estate market.
Asia Pacific’s commercial real estate market has felt the brunt of COVID-19 so far this year, with a sharp decline in investment volumes and rental prices across most major commercial asset classes, according to real estate services firm JLL.