Positive outlook for real estate M&A in 2022

Real estate mergers and acquisitions (M&A) are expected to be a good source of FDI in Vietnam this year, said Savills, and forecasting M&A activity is likely to increase in terms of frequency and value.
Positive outlook for real estate M&A in 2022 ảnh 1The M&A outlook for 2022 is bright as Vietnam is an increasingly attractive destination for international businesses. (Photo: laodong.vn)
Hanoi (VNS/VNA) - Real estate mergers and acquisitions (M&A) areexpected to be a good source of FDI in Vietnam this year, said Savills,and forecasting M&A activity is likely to increase in terms offrequency and value.

Le Thi Phuong Lan, head of Investment, Savills Hanoi, believes Vietnamhas enormous investment potential, saying: “Foreign investors should beaware of the potential obstacles within M&A deals.“

Vietnam has an active M&A market. In 2021, real estate businesses receivedmore than 31 billion USD of registered FDI. However, disbursed capitaldecreased by 1.6 billion USD year-on-year and reached 2.6 billion USD. 

The M&A outlook for 2022 is bright as Vietnam is an increasingly attractivedestination for international businesses, said Lan, adding that as bordersreopened on 15 March and travellers from 13 countries are now allowed to enterthe country without a visa, M&A deals are likely to increasealong with other real estate investments.

“The reason for this is that investors can now travel to properties and conductmarket research, understand business models, or evaluate the potential ofsites,” she said.

Savills research shows two factors that make Vietnam anattractive investment destination. They are the favourable macroconditions offered to investors, including steady economic growth,political stability, improving infrastructure links, increasing urbanisation,and a large and young workforce and attractive support policies,such as tax incentives.

According to FocusEconomics, Vietnam has one of the fastest-growingeconomies in the APAC region and will have the fastest growingeconomy in the region in 2022, and the momentum is expected to continue into2023. 

Vietnam is connecting to the region not only by a growing road system butalso by international seaports, airports, and land borders. The Ministry ofPlanning and Investment has announced plans to launch the mostextensive socio-economic development and recovery plan withmore than 100 trillion VND dedicated to infrastructuredevelopment. 

Real estate experts think it will increase the potential satelliteprovinces have to attract FDI enterprises. The improved transport linkswill allow FDI enterprises to expand further from established hubs like Hanoiand HCM City. 

In terms of human resources, Vietnam has a large and young workforcecoupled with competitive labour costs. At the same time, the increasinglyurban population also creates great potential for developing newurban area projects, mention experts.

In terms of supporting policies, the Government aimed to curbthe impact of the pandemic and offered support such as facilitatingthe circulation of goods, debt restructuring, and tax extensions andexemptions during the pandemic, together with supportive economicpolicies, a successful national vaccination campaign, which have helpedthe country gain investors’ hearts, said Lan.

“In 2022, we have seen encouraging M&A activities. Of industriesreceiving investment, real estate ranked second and has received nearly 1.52billion USD, or 30.4 percent of total registered FDI. These investmentsdemonstrate that foreign investors remain bullish on developing real estateprojects in Vietnam,” she said.

Showing enormous investment potential in Vietnam, Lan alsomentioned legal barriers, difficulties with joint venture partners,uncertainty with the M&A process, and different pricing approaches thatmight hurt the M&A, saying Vietnam had relatively complicated landlaws.

Lan considered the inconsistencies betweenlaws could result in wasted time and money despite institutionalreforms over the last few years.

The expert pointed out that when doing business in Vietnam, most foreignenterprises entered joint ventures. The foreign enterprise held the maindecision-making power and the Vietnamese investors provided legal support.However, negotiations may be time-consuming due to the differences inbusiness practices and legal structures. 

As M&A was still a relatively new concept in Vietnam, manybusinesses, especially small and medium-sized enterprises,were not prepared for the processes involved, said Lan, adding thatprojects may struggle to attract investment. 

“Although M&A deals are increasingly popular, there are still potentialobstacles for foreign investors. M&A transactions are a complex commodity;therefore, the involved parties need to research and develop detailed plans toensure long-term value carefully," Lan said.

"With our own experience of entering the Vietnamese market and aidinginternational clients, Savills understands the needs and concerns of FDIcompanies. Besides short-term profits, we aim to create long-term value inM&A deals.”/.
VNA

See more

Prime Minister Pham Minh Chinh and Thai Prime Minister Paetongtarn Shinawatra witnessed the exchange of the MoU between the Ministry of Industry and Trade and Thailand's Central Group. (Photo: VNA)

MoIT, Thailand’s Central Group forge partnership to boost Vietnamese exports

The MoU, signed as part of Thai Prime Minister Paetongtarn Shinawatra’s official visit to Vietnam from May 15-16, was the result of extensive discussions between the two sides, aimed at enhancing the presence and competitiveness of Vietnamese products, particularly consumer goods, and agricultural and aquatic products.

Chu Lai Port welcomes the Chana Bhum, a Singapore-flagged vessel operated by RCL, marking the opening of the Chu Lai–India shipping route. (Photo: VNA)

Vietnamese firm, Thailand-based shipping line cooperate to launch Chu Lai - India direct call service

The direct call service helps cut transportation time, reduce costs, increase competitiveness by bypassing major transshipment ports in northern and southern Vietnam. At the same time, it opens up new trade opportunities, promotes logistics activities, develops supply chains, strengthens regional connectivity, and enhances the position of Chu Lai Port on the international maritime map.

Deputy Minister of Finance Cao Anh Tuan grants an interview to the Vietnam News Agency (VNA). (Photo: VNA)

Vietnam, US foster bilateral economic, financial cooperation

Strengthening the Vietnam - US economic and financial cooperation will open new avenues for collaboration and serve as a symbol of trust and a substantive Comprehensive Strategic Partnership for mutual prosperity, a Vietnamese official has said.

Ba Ria-Vung Tau seaport (Photo: VNA)

Resolution 68: A game-changer for Vietnam’s private sector

Beyond regulatory reform, Resolution 68 provides support policies for access to land, capital, and high-quality human resources, while also promoting digital transformation, innovation, sustainable development, and global value chain integration.

A booth at VietOffice 2024. The first VietOffice held in May last year was a success, generating positive results. (Photo: VNA)

VietOffice 2025 expected to attract 100 exhibitors

The event will see the participation of about 100 exhibitors from eight countries and territories, namerly India, Taiwan (China), China, the Republic of Korea, Japan, Hong Kong (China), the US, and Vietnam.

Illustrative image (Photo: VNA)

Exporters diversify orders to reduce reliance on single market

Facing the risks posed by trade barriers and potential reciprocal tariffs from the US, many businesses have proactively shifted their market strategies, stepped up trade promotion, and diversified their orders to reduce reliance on a single market.

A customer buys petrol at a station in Hanoi. (Photo: VNA)

Government proposes 2-pp VAT reduction on select goods and services until 2026

A 2-percentage-point reduction in the value-added tax (VAT) for goods and services will lead to a decrease in state revenue by approximately 121.74 trillion VND (over 4.69 billion USD) over the proposed period. This includes an estimated 39.54 trillion VND in the second half of 2025 and 82.2 trillion VND in 2026.

Illustrative photo (Photo: VNA)

Petrol prices up in latest adjustment

E5 RON92 petrol is now capped at 19,180 VND (0.74 USD) per litre, up 403 VND from the previous adjustment, while RON95-III petrol costs 19,594 VND per litre, up 415 VND.

Delegates at the groundbreaking ceremony. (Photo: VNA)

Ba Ria-Vung Tau: New phase of luxury resort project kicks off

The nearly 1 billion USD subdivision includes a system of 5-star hotels, resort villas, entertainment facilities, a casino, and an international convention and exhibition centre, with more than 6,000 rooms, serving over 18,000 guests at the same time.