Property sector in H1 defined by M&A flurry
Property sector in H1 defined by M&A flurry
An increase in M&A in the real estate sector has been highlighted by two significant announcements in the first half of 2014.
Novaland, a domestic real estate investor, recently announced it would take over three housing projects in Ho Chi Minh City. Also, Korea’s National Housing Organisation announced that it would invest in 14 housing projects in Vietnam.
In the first quarter of this year, Vinaland, the real estate arm of VinaCapital, divested its stake in Vina Properties, which owns the luxury Movenpick Saigon Hotel in Ho Chi Minh City.
Many other developers are divesting from their projects and issuing shares in order to mobilise more capital investment.
CEO Group has bought out the Sonasea Villas and Resort in Phu Quoc island, which looks set to becoming one of the country’s most lucrative tourist markets.
In the case of FLC group, in addition to recently taking over Alaska Garden City in Hanoi, the group also has their eye on many projects in other provinces.
Apart from that, there have been many other undeclared transactions.
In its latest shareholders meeting, the Hoang Anh Gia Lai group announced that it had sold a 35-hectare project to the Him Lam group, with a value of VND1,100 billion ($52 million).
Another investor from Hong Kong, Sunwah, has bought a 90-hectare area in the Binh Thanh district of Ho Chi Minh City to develop a complex with investment capital of more than $200 million.
According to Phan Xuan Can, chairman of SohoVietnam, M&A activity in the real estate market has been the highest it has ever been in Vietnam.
“Many investors come to us and require information about projects on offer, from apartment buildings, to offices, to high-end resorts and complex buildings. The real estate market now is in a recovery phase and this is a good time for sellers to offload their projects at the best price. Meanwhile, buyers can now target projects,” Can said.
Can added that it was hard to get a successful real estate project for both sellers and buyers because of the many procedures and financial details required. This is compounded by the fact that neither sellers nor buyers want to declare these details.
Minister for Construction, Trinh Dinh Dung said the real estate market is facing many difficulties at present, and that local authorities should be more careful when it comes to licensing new projects. Several local authorities have stopped granting new projects.
“This is a good reason for developers to consider M&A projects. That is why I predict that the M&A trend in the real estate sector for 2014 and 2015 will become even more popular,” Dung said
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