COVID-19 has caused a big change in real estate merger and acquisition (M&A) activities in Vietnam. Domestic investors are growing stronger with abundant capital, so they have been more proactive and bold in M&A activities. For example, the real estate enterprise Hung Vuong Holdings is shortening the process from a distributor to a real estate investor through M&A.
Novaland is also promoting the purchase of hundreds of hectares of land in many provinces by carrying out a series of M&A deals. Currently, this enterprise continues to search for land funds in Dong Nai, Long An, Ba Ria - Vung Tau, Lam Dong, Phan Thiet, etc., to develop urban areas and tourism real estate.
An Gia Group also announced the M&A strategy as a direction to build land banks. At the recent General Meeting of Shareholders in 2021, an An Gia leader representative said that in 2021, this real estate company would complete the negotiation process to buy another 30 - 50 hectares of low-rise land funds to develop projects.
Similarly, Nam Long is focusing all its resources to expand its land bank. Nam Long's goal is that the land bank must have a large scale and location in satellite cities and provinces, or be located at the gateway of the Southern Key Economic Region, even reaching out to the North.
With positive developments in the control of the COVID-19 pandemic, the real estate market will likely recover strongly by the end of this year. The increased demand will create good liquidity when all activities are more feasible with the lifting of lockdown and social distancing. In particular, land products in the suburbs with good traffic connections, especially those belonging to reputable owners will continue to be a segment of interest to investors. In addition, many investors took profits from stocks and turned to invest in land plots. This trend will continue until the end of 2021.
According to experts, Vietnamese real estate investors have been more proactive in real estate M&A activities. Not only are they active in finding transactions, but domestic investors have actively sought land funds for investment.
For foreign investors, the leading position belongs to investors from Japan, Korea, and Singapore. These are the top three countries in M&A activities at the project or company level in Vietnam's real estate market in the past 15 years.
Currently, foreign investors only account for a small part of Vietnamese investors when it comes to mergers and acquisitions in the real estate sector. In recent years, the number of successful M&A deals has mostly been among domestic investors.
It can be affirmed that domestic investors still play an important role and foreign investors' capital contributes to promoting the real estate market to become more vibrant. New investors who have not yet operated in Vietnam are paying great attention to the market, especially in the fields of urban housing, industrial parks, logistics, resort, hotels.
In Vietnam, M&A deals are usually done through project company M&A. The transfer in the form of property transfer is mainly done with operating assets, but also faces many difficulties in procedures and tax-related issues. For many reasons, including the impact of the COVID-19 pandemic, the legal completion of many projects slowed down. That also affects the success or failure of M&A deals.
However, M&A activities in the real estate sector are still a potential market. Vietnam has a good foundation to launch M&A activities and bring this market to a rapid recovery with several attractive sectors for investors such as real estate, retail, or consumption.
Source: The Ministry of Industry and Trade
