A corner of the Phu My Hung residential area in District 7, HCM City (Photo: VNA) Hanoi (VNA) – Since the Investment Law tookeffect in July 2015, Vietnam’s FDI inflows, and the real estate sector inparticular, have significantly increased in terms of merger and acquisition(M&A) activities.
Statistics released at the Vietnam M&A Forum in Ho Chi Minh City in August 2018 showed thatin the first five months of the year, the total value of M&A transactionsin the Vietnamese market had reached 3.55 billion USD, equivalent to 155percent of the figure recorded in the same period last year. Of the sum, propertydeals made up 66.75 percent.
Meanwhile, in 2017, M&Adeals were valued at 10.2 billion USD, up 175 percent against 2016, with realestate accounting for only 27 percent following consumer goods production with57 percent.
Therefore, the numbersreported in the first half of the year demonstrate that the real estate sectorhas attracted greater attention from both domestic and foreign investors.
One of the most noteworthydeals of the 2017-2018 period was between the Government of SingaporeInvestment Corporation (GIC) and Vinhomes, a subsidiary of Vingroup.
US private-equity fund WarburgPincus also teamed up with BW Industrial Development JSC (Becamex IDC) to set upa joint venture, worth over 200 million USD, to develop logistics facilitiesand industrial property in Vietnam.
Moreover,Warburg Pincus also partnered with Vietnam’s asset management firmVinaCapital to invest 300 million USD in a hotel venture.
NguyenNgoc Khuong, Investment Director of Savills Vietnam, said that unlike previousyears when investments in property were virtual, the recent capital is real.
Inaddition to M&A activities, domestic and foreign businesses have alsojoined hands in implementing real estate projects in a variety of segments.
Accordingto Vu Tien Loc, Chairman of the Vietnam Chamber of Commerce and Industry(VCCI), FDI firms hold advantages in capital, technology, and administration,while domestic enterprises hold a better understanding of local law and culture– a necessary partnership.
Khuongsaid Vietnam’s propertymarket has attracted foreign investors thanks to the profits it promises, aswell as economic growth, and the State’s policies towards foreigners who ownhouses in Vietnamand incentives for foreign investors.
LeHoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, saidM&A activities in real estate are significant as they have helped lure moreinvestments in the sector, increase the market’s liquidity, reduce stockpiles,and regain confidence in the market, while creating conditions fortransparency, towards a more professional playground. –VNA
VNA
