Foreign investors dominate real estate M&A market in Vietnam

In the reviewed period, the M&A market value in Vietnam neared US$3.2 billion, down 62% from the same period last year, according to Dao Thien Huong, Deputy General Director of EY Consulting Vietnam JSC.

She said that 92% of the buyers of M&A deals in real estate in Vietnam are foreign investors, mostly from Taiwan, Singapore and the RoK.

Notably, ESR Group Limited, one of the largest asset management companies in Asia - Pacific, spent US$450 million to increase its ownership in BW Industrial Development Joint Stock Company (BW Industrial) in January 2023. This was the largest deal in the real estate market and an outstanding deal in the industrial property segment.

In the housing and urban area segment, Gamuda bought a 3.68-hectare project in Ho Chi Minh City’s Thu Duc city with US$305 million in early July, the biggest in this market segment.

Other major deals included Keppel Corporation’s acquiring of an 11.8-hectare project from Khang Dien with US$277 million and a retail project in the city downtown of Hanoi at a price of about US$80 million.

According to Huong, currently many M&A deals in the real estate sector are under negotiations. However, the process has encountered many difficulties, including those in the legal corridor regarding foreign investors’ owning of real estate in Vietnam.

Lawyer Ngo Thi Van Quynh, Director of An Legal company, said that the complicated legal procedure is one of the major reasons behind the slow progress of M&A deals, which has caused an increase in time and cost needed.

The Government has made positive steps to improve the legal framework in the field while drafting the Law on Real Estate Business (revised), aiming to make it easier for foreign investors to develop their projects. Quynh said that she hopes from 2024, M&A projects in real estate sector will become more bustling.