Capital thirst to fuel real estate M&A: insiders

Illustrative image (Source: baodautu.vn)

Hanoi – Many property developers are planning asset and stock sales as they look to slash debts, restructure business and stay afloat, which is expected to lead to a surge in M&A deals in the market.

The real estate’s present worst period will offer an opportunity for Khai Hoan Land Group JSC to embarked on big M&A deals, its General Director Dinh Thi Nhat Hanh said.

Currently, the domestic property market is witnessing M&A deals worth hundreds even thousands of billions of VND, Dau tu (Investment Review) reported.

NoVa Real Estate Investment Group Joint Stock Company (Novaland, HOSE: NVL) just announced that it has reached an agreement with its "bondholder" Dallas Vietnam Gamma Ltd. The companies have negotiated and reached an agreement to reduce the number of outstanding bonds and warrants through a swap agreement.

Accordingly, Dallas Vietnam Gamma Ltd will receive a portion of shares in two member companies of Novaland, namely Thanh Nhon Real Estate Investment Company Limited and Mui Ne General Investment Joint Stock Company, in exchange for the cancellation of a corresponding number of bonds and warrants.

Nguyen Quoc Anh, Deputy Director of batdongsan.com.vn, Vietnam's leading real estate trading website, said M&A activities are expected to rise in the time ahead as investors will continue their attention on debt and capital restructuring.

David Jackson, CEO of Colliers Vietnam, a real estate consulting service firm, noted that foreign investors are confident in Vietnam’s real estate market, and M&A activities will play a key role in “rescuing” domestic property developers and recovering the market.

There is a wave of M&A in the Vietnamese real estate market, he said, adding that Colliers has received many requests from both domestic and foreign investors, mainly from North Asia, North America and Europe.

Duong Thuy Dung, Director of Research and Consulting, CBRE Vietnam, said new foreign investors, including those from South Africa and the Middle East, have showed interest in the Vietnamese market.

However, she pointed to roadblocks to M&A deals such as high loan interest rates offered by foreign investors, at about 18-20% each year, while domestic firms expected them at only 13-15%.

Experts predicted that the obstacles will linger on for the remaining months of this year, and said they hope that deals will be fixed in the fourth quarter or in 2024.

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