JLL Vietnam: Investors look for M&A property in Vietnam

The Tan Binh Industrial Park in HCM City. Investors are looking industrial and logistics assets through joint ventures with local industrial developers and/or acquisition of land bank and operating real estate. - Photo sggp.org.vn

The company also said mergers and acquisitions (M&A) in real estate is a bright spot in the market because the manufacturing trends is shifting away from China to the Southeast Asia region and will continue to benefit the whole region, including Vietnam.

The lack of high specification, modern logistics warehouse space, and strong demand from regional occupiers are supporting potential growth.

Quality of the assets, rental growth, deal size and remaining land tenure are the key crucial factors for investors to determine their investment decisions, said Nguyen Thi Van Khanh, senior director, Capital Markets, JLL Vietnam.

“We expect foreign investors to continue showing keen interest and strong commitment in Vietnamese real estate market, and the market still has the potential for growth,” Khanh said.

Although the M&A activities might potentially occur at slower pace and lower frequencies in remaining two quarters due to lack of readily available projects to invest, the Government’s existing policies will improve transparency in the market. This would ensure Vietnam’s competitiveness and attract even more investors from the region, according to JLL Vietnam.

With readily available land areas to develop residential and commercial projects harder to find in the central business districts (CBD) or in well-known areas in the city, JLL said a number of investors and developers are looking to expand their footprint towards other neighbouring provinces.

Notable developers include Novaland with its Aqua City township project in Long Hưng, Đồng Nai Province, Nam Long with acquisition of Đồng Nai Waterfront in the early of this year and its last year’s acquisition of Đại Phước Paragon, a 45ha township located in Nhơn Trạch, Đồng Nai Province and Keppel Land’s acquisitions of three land parcels in HCM City recently.

Although there are a number of new developers and investors who are looking at these emerging areas, JLL said that the majority is still dominated by local or foreign groups who have been long-established in Vietnam.