Many foreign investors interested in M&A deals in real estate market: VAR

Illustrative image (Source: Vinhomes)

Hanoi – There has been a surge in the number of foreign investors interested in merger and acquisition (M&A) deals in the Vietnamese real estate market, which is a hope for Vietnamese property developers amid the current capital thirst, according to the latest market research released by the Vietnam Association of Realtors (VAR).

According to the research, in early 2022 when monetary policies in Vietnam was loosened strongly with high credit growth and decreased interbank interest rates, M&A activities bustled with a series of large deals.

In the first quarter of 2022, the total value of M&A transactions was higher than those recorded in a year in the 2019-2021 period, it said.

Experts held that the real estate market of Vietnam has still been attractive for domestic and foreign investors. However, the difficult economic situation has prevented them from investing in large-scale deals and forced them to focus on small and medium-scale ones.

Meanwhile, there are only few domestic real estate developers having the capital capacity for property purchase amid decreased liquidity and high financial cost. Therefore, big deals are expected to come from foreign investors.

Data from the VAR showed that the number of foreign investors interested in M&A projects in the Vietnamese real estate sector is increasing sharply, especially those from Singapore, the Republic of Korea, Taiwan (China), Japan and Malaysia. However, the majority of the deals are on the verification and negotiation processes.

Along with difficulties during negotiations, there are still some obstacles hindering M&A activities, including legal conditions which prevent many projects from being acquired as they fail to meet the conditions.

Vietnam tasked with gaining FDI edge Boosting both the quality and quantity of foreign investment is being called an imperative for Vietnam as it attempts to improve on 2023 results so far.

Vietnam secures 10.86 billion USD in FDI in first five months Total foreign direct investment (FDI) in Vietnam, including new and additional investment and contributions for share purchases by foreign investors, reached nearly 10.86 billion USD from January to May 20, according to the Ministry of Planning and Investment.

Gaining the confidence of foreign investors Vietnam’s successful attraction of foreign investment over the years places it as a leading country among economies of similar size. Dominic Scriven, chairman of Dragon Capital Fund Management Company, told Luu Huong how Vietnam possesses ample confidence to channel such funding into its infrastructure, and also looks at the future prospects of the stock market.