According to experts, given the positive macroeconomic situation and the re-opening of international flights, the real estate merger and acquisition (M&A) market will certainly be more active.
Contrary to the expectations of some experts about the risk of a real estate "bubble", the real estate merger and acquisition (M&A) market in the first quarter of 2022 was still active with a series of deals. great. Real estate businesses continuously acquire more large land funds.
According to the statistics of the first quarter, Vietnam's GDP reached a growth rate of 5.03%. The registered capital of foreign direct investment (FDI) in Vietnam market reached 3.2 billion USD. Disbursed FDI amounted to 4.42 billion USD. This was the highest increase in half a decade and increased by 7.8% year-on-year.
Notably, after the manufacturing and processing industry, real estate is currently the second largest recipient of FDI in the past 10 years.
Particularly in the first quarter, the real estate market has witnessed a number of outstanding M&A deals in Ho Chi Minh City such as the "handshake" between Novaland and Tai Nguyen Construction Production Trading Co., Ltd. restart the Grand Sentosa project (former name Kenton Node), an area of 11ha in Nha Be area.
Similarly, in District 1, Saigon One Tower has been renamed IFC One Tower, managed by VivaLand Investment and Development Joint Stock Company.
In Dong Nai area, the Swan Bay project with an area of about 200 hectares will be further developed by Phu Long Real Estate Joint Stock Company.
The total value of M&A transactions in the first quarter is higher than the total value of each year 2019-2021. The office segment accounted for 58% of the total transaction value, while the industrial and residential segments accounted for 28% and 13% respectively.
Notably, Hanoi has the largest total transaction volume in the country, thanks to the transfer of Grade A office building Capital Place (Ba Dinh, Hanoi) from CapitaLand Development to Viva Land with a total value of $550 million. .
Ms. Trang Bui - General Director of Cushman & Wakefield Vietnam, said that the total office supply in Ho Chi Minh City and Hanoi is approximately equal to that of Bangkok, mainly consisting of Grade B and C buildings; Grade A assets, which are sought after by FDI enterprises, are very scarce. Therefore, as soon as employees are returned to the office after a long time of applying restrictions on movement, office M&A transactions have been promoted to the leading position.
[Exciting M&A race in the real estate market]
From 2017 to now, the taste of investors has mainly focused on traditional property types including housing market, development land, industrial, office and retail market; in which, 76% of housing transactions are concentrated in Ho Chi Minh City; while Bac Ninh, Dong Nai and Binh Duong account for more than 50% of industrial real estate investment; Hanoi owns 65% of hotel transactions.
According to Ms. Trang, domestic and foreign investors have shown considerable interest in the development of real estate projects, from apartment projects to industrial, commercial and real estate. use. The market will also witness a strong recovery story in the resort and retail sectors, which have been restrained in recent times thanks to the reopening of international routes. The residential real estate market is also expected to be positive, Ms. Trang forecast.
On the other hand, because the market is "dominated" by domestic investors, many international investors still prefer to participate in the form of joint ventures with domestic partners. Most investors are involved in joint ventures and M&A deals rather than pure real estate transactions.
Ms. Trang said that there is no shortage of investment money, but the difficulty lies in the opportunity. The biggest barrier is the scarcity of suitable land in big cities like Ho Chi Minh City and Hanoi for project development.
Besides, one of the most important things for international investors is transparency. "The more transparent the market is, the more interested foreign investors are. If the market is not transparent enough, there is not enough information and data, transactions are slow, and land ownership is unclear, then it is a challenge. form for foreign investors Foreign investors have a lot of capital, waiting to be invested in real estate They want to cooperate with local investors but they need the transaction to happen quickly, " Ms. Trang shared.
Recently, the Government has agreed to develop an amended Law on Housing and an amended Law on Real Estate Business, which will be submitted to the National Assembly at the Fourth Session, October 2022, and has a proposal to submit to the National Assembly for approval. and approved the Land Law (amended) to create a legal basis for the business of land use rights. When passed, these laws will have a great impact on the real estate market.
A series of existing problems related to the real estate market such as investment activities and legal procedures, because the relevant legal system has gradually improved, there are no longer conflicts between regulations in the legal system. on investment. This will remove many existing barriers for real estate M&A activities this year, this expert expects.
Given the positive macroeconomic situation and the reopening of international flights, surely the M&A market will be even more exciting. Because "at risk," many businesses with strong financial capacity have conducted assessments and long-term development plans after the pandemic.
The market is growing and maturing at a faster rate than before. Market participants from project developers, investors, banks and state regulators are more cautious in each of their actions and roles.
Experts share the same opinion that in 2022, Vietnam's real estate market will continue to develop well and be a shining year, although there are still many difficulties.
By TTXVN