Real estate dealmaking can level up through revised laws
Real estate dealmaking can level up through revised laws
Vietnam’s mergers and acquisitions in the real estate market are expected to become more attractive to foreign investors following the entry into force of several related laws in August, although effective implementation will take time.
Tran Ngoc Liem, director of the Vietnam Chamber of Commerce and Industry in Ho Chi Minh City, said that the implementation of the Land Law 2024, Housing Law 2023, and Real Estate Business Law 2023 is a major turning point, opening up many new opportunities for the real estate sector and the economy in general.
“These laws are expected to resolve outstanding problems, unleash resources for new projects, make the real estate market more transparent, and contribute to harmonising benefits and improving the efficiency of housing and land management activities,” Liem said at a workshop on the issue, organised by the Vietnam International Arbitration Centre in coordination with the Vietnam Industrial Trade Union in July in Ho Chi Minh City.
Talking with VIR, Angus Liew, chairman of Gamuda Land Vietnam, said that the demand for real estate remains high, especially in Ho Chi Minh City and Hanoi.
“That’s why I think the new law will attract more investors to Vietnam, particularly from the perspective of foreign investors,” Liew said. “I think there will be more foreign investors participating in the market. As one of the foreign investors in the market for about 20 years, we see this as a good opportunity to participate in Vietnam.”
Although this amended law is still very new, Liew said, developers, investors, and buyers must consider what they can and cannot do with this new law.
“But I clearly see that the Vietnamese government is making great efforts to support investors and the market. This is one of the breakthroughs in the market today. Some other issues, like whether the government should reclaim land within 12 months or 24 months, are also positive steps to avoid wasting land resources,” he said.
According to Cushman & Wakefield’s (C&W) capital markets outlook update, released on July 31, some $70 billion is waiting to be invested into the Asia-Pacific as markets are poised for recovery in 2025.
“This significant volume of dry powder is expected to target debt, opportunistic, and value-add assets and will be deployed as investors look for the optimum time to actively resume their investment pursuits,” said Gordon Marsden, head of Capital Markets for Asia-Pacific at C&W. “Investors have been in the ‘wait and see’ phase over the last 18-24 months, and there is growing anticipation that investment volumes will recover in 2025.”
Su Ngoc Khuong, senior investment director at Savills Vietnam, said that in the first half of this year, foreign investors were interested in mergers and acquisitions (M&As) in Vietnam’s real estate sector.
“Savills itself successfully brokered a deal worth several hundred million dollars, demonstrating the level of interest of foreign investors in the Vietnamese market,” Khuong told VIR. “Asian investors, particularly from Japan, South Korea, Singapore, and other countries that have traditionally invested in Vietnam’s real estate market, are especially active.”
Foreign investors, developers, home buyers, and lending credit institutions are particularly interested in the new laws as well as changes in the Law on Credit Institutions.
“However, we also need to see how these new laws will be implemented by state management agencies, how society and the market will react, and then we can adjust the method for deployment accordingly,” Khuong said.
“Despite high expectations, there might not be significant progress in the second half of the year as the market begins to implement the new laws, which will take time to absorb and adapt to.”
Foreign direct investment in the real estate business sector reached $1.89 billion in the first half of this year, accounting for nearly 20 per cent of total newly registered capital, 4.7 times higher than the same period last year.
However, data and information on project mergers and acquisitions indicate that foreign investors are more prominent in the real estate M&A race.
Minh Khoi, a private M&A expert, said many land funds for housing projects are receiving special attention from investors.
“However, they are waiting for more positive signals from the government and departments to resolve outstanding issues, typically in land use fees, site clearance, and compensation. Many office buildings and hotels are being observed and reviewed by investors to negotiate prices and transaction structures,” Khoi told VIR.
Announced deals mainly focus on industrial parks, logistics, and manufacturing, in a range of localities. For example, Mapletree Logistics Trust, a Singaporean investment fund, acquired two Grade A warehouses in Vietnam, located in Binh Duong and Hung Yen provinces.
Other notable deals include Phat Dat Group receiving the transfer of 99 per cent of the capital contribution of Bac Cuong Investment Company in the Tran Phu Danang project, which consists of more than 400 apartment and hotel units; and Vinhomes transferring two plots of land with an area of more than seven hectares in Vinhomes Grand Park in Ho Chi Minh City to Masterise Homes in June.
Notably, Sky World Development Berhad announced in July that it had completed a deal valued at $14.3 million for a land plot from Thuan Thanh JSC. SkyWorld received several land lots, including a plot of more than 2,000 sq.m and five parcels between 64 and 1,000 sq.m, all in District 8 of Ho Chi Minh City.
In June, Kim Oanh Group partnered with four Japanese firms to invest in Binh Duong’s $1-billion property project. The One World urban area project covers nearly 50 ha and is envisioned as an “all-in-one” complex, offering a comprehensive array of amenities including conference and convention centres, 5-star hotels, shopping centres, schools, healthcare facilities, sports and fitness centres, as well as office spaces.
According to the agreements, Kim Oanh Group holds a 51 per cent stake in the project, while the three Japanese partners – Sumitomo Forestry, Kumagai Gumi, and NTT – collectively hold the rest. Additionally, AEON Vietnam will develop and manage a large-scale, high-end shopping centre within The One World urban area.
