Merger and acquisition (M&A) deals in the real estate market are on the rise. Economic experts were quoted by the Vietnam Business Forum Magazine (VBF) as saying that the prolonged lacklustre property market had provided plenty of M&A opportunities for companies with strong financial resources.
The sharp increase in M&A property deals during market recovery has reflected the strong pull of the real estate market. Opportunities are in the hands of companies with strong financial capacities, according to VBF.
The National Housing Organisation (NHO), a joint venture between TAG Joint Stock Company and NIBC Investment Company Limited, invested nearly 1 billion USD, an equivalent to 21 trillion VND, to control many property projects owned by various companies in major cities and provinces like Hanoi, Ho Chi Minh City, Da Nang and Binh Duong.
Licogi 16 Joint Stock Company also transferred its Sky Park Residence Project in Hanoi to Thanh Hoa Construction Corporation for 143 billion VND. And, the success of many big M&A deals has caught the attention of public. For instance, FLC Group purchased ION Complex Project at a prime location in Hanoi from Hai Phat Investment Joint Stock Company.
Phan Xuan Can, President of Soho Vietnam Real Estate Consulting Company, said, in spite of still being in difficulty, property transfers have never been ever eventful as now, especially when the real estate market has shown signs of recovery. Many companies with strong financial bases have rushed to take over projects at the most reasonable values.
According to experts, together with the revival of the property market, deals have started to increase and market liquidity has gradually improved. Many people have become more interested in real estate projects while owners have ended their stop-loss sales. Hence, many companies envisaged the solid recovery of the property market and they rushed to acquire investment projects.
Investors are offered projects with very attractive prices. They do not have to conduct time-consuming paperwork and deal with complicated troubles arising from land clearance and compensation. Instead, they can start doing business immediately.
However, transfers are not always easy because new owners have to spend much time and effort to contact and connect old partners and build up the trust with them to continue their projects smoothly. They also have to review all customers to have satisfactory explanations to continue fundraising activities and property handovers in the future.
Marc Townsend, Managing Director of CBRE Vietnam, said M&A is not actually the solution to deal with inventories but it is a good opportunity for businesses to perform restructuring, continue their projects and even develop new ones.
"Not all M&As are successful. Buyers have many options and they only pick up good ones. Besides, price is sometimes not the deciding factor but the similarity of development orientations between buyers and sellers. Indeed, M&As depend on many factors like price, location, legality and insider sentiment,” he stressed.
According to economists, M&As have helped the market to remove ailing businesses and make experienced, strong businesses more powerful. This benefits the real estate market and homebuyers in the long term, and strengthens market stability.-VNA
The sharp increase in M&A property deals during market recovery has reflected the strong pull of the real estate market. Opportunities are in the hands of companies with strong financial capacities, according to VBF.
The National Housing Organisation (NHO), a joint venture between TAG Joint Stock Company and NIBC Investment Company Limited, invested nearly 1 billion USD, an equivalent to 21 trillion VND, to control many property projects owned by various companies in major cities and provinces like Hanoi, Ho Chi Minh City, Da Nang and Binh Duong.
Licogi 16 Joint Stock Company also transferred its Sky Park Residence Project in Hanoi to Thanh Hoa Construction Corporation for 143 billion VND. And, the success of many big M&A deals has caught the attention of public. For instance, FLC Group purchased ION Complex Project at a prime location in Hanoi from Hai Phat Investment Joint Stock Company.
Phan Xuan Can, President of Soho Vietnam Real Estate Consulting Company, said, in spite of still being in difficulty, property transfers have never been ever eventful as now, especially when the real estate market has shown signs of recovery. Many companies with strong financial bases have rushed to take over projects at the most reasonable values.
According to experts, together with the revival of the property market, deals have started to increase and market liquidity has gradually improved. Many people have become more interested in real estate projects while owners have ended their stop-loss sales. Hence, many companies envisaged the solid recovery of the property market and they rushed to acquire investment projects.
Investors are offered projects with very attractive prices. They do not have to conduct time-consuming paperwork and deal with complicated troubles arising from land clearance and compensation. Instead, they can start doing business immediately.
However, transfers are not always easy because new owners have to spend much time and effort to contact and connect old partners and build up the trust with them to continue their projects smoothly. They also have to review all customers to have satisfactory explanations to continue fundraising activities and property handovers in the future.
Marc Townsend, Managing Director of CBRE Vietnam, said M&A is not actually the solution to deal with inventories but it is a good opportunity for businesses to perform restructuring, continue their projects and even develop new ones.
"Not all M&As are successful. Buyers have many options and they only pick up good ones. Besides, price is sometimes not the deciding factor but the similarity of development orientations between buyers and sellers. Indeed, M&As depend on many factors like price, location, legality and insider sentiment,” he stressed.
According to economists, M&As have helped the market to remove ailing businesses and make experienced, strong businesses more powerful. This benefits the real estate market and homebuyers in the long term, and strengthens market stability.-VNA
