Real estate M&As expected to reach record high in 2017
According to the Foreign Investment Agency (FIA), foreign investors have poured capital into 19 of 21 business fields so far this year, of which real estate ranks second with investment capital of $53 billion.
Analysts said foreign investors are interested in the sector because of the expected GDP growth rate of 6.3-6.5 percent in 2017 and new policies which make it easier for foreign investors to buy a stake in domestic enterprises.
Savills Vietnam said foreign investors continue to be present in the Vietnamese market in 2017 through M&A deals.
Leading Japanese real estate groups such as Haseko, Fujita and Mitsubishi are looking for real estate projects in Vietnam.
Mitsubishi, known for its projects in the fields of energy, chemicals, food and finance, has decided to join forces with Vietnam’s Bitexco to develop housing projects in Hanoi with total investment capital of hundreds of millions of dollars.
Stephen Wyatt, CEO of Jones Lang Lasalle (JLL), also thinks the M&A in the real estate sector will increase sharply in 2017 and reach a record high.
JLL noted that billions of dollars are awaiting opportunities to be funneled into the Vietnamese real estate market. Though investors eye all market segments, the capital will mostly flow to apartment, office, hotel and middle-class industrial zones.
In March 2017, Keppel Land acquired a 16 percent stake in Saigon Center, a high-end complex of offices & shopping malls in HCMC from Sowatco in a deal worth VND845.9 billion.
Meanwhile, Hongkong Land has become the strategic partner of CII in developing the housing projects on land allocated to CII in the Thu Thiem new urban area.
More recently, Kajima, one of Japan’s four biggest contractors, has joined hands with Indochina Capital, investor in many real estate projects in Vietnam, to set up a 50/50 joint venture to implement the plan on investing $1 billion within 10 years in Vietnam.
In the immediate time, the joint venture will focus on housing, hotel and resort projects in Hanoi, HCMC and Da Nang.
Keisuke Koshijima, Kajima’s overseas market development director, said compared with other regional markets, Vietnam is the key market for Kajima.
A report from CBRE shows that the foreign investor who took over 70 percent of the ownership of the A&B office building in the central area of HCMC was an investor from Japan.
Explaining the attractiveness of the Vietnam real estate market, Duong Thuy Dung from CEo said that barriers for foreign investors have been removed and the performance of other regional markets is not as good as Vietnam’s.
Kim Chi, VNN