M&As to return to property market: experts

NovaWorld Phan Thiet in Binh Thuat Province spreads over an area of 1,000ha

Many studies by research companies have indicated M&A activities will be back on track in 2021.

Around 42 per cent of survey respondents predicted M&A to be worth US$3-4 billion this year.

Some 26 per cent expected it to be $4-5 billion.

Of the rest, 24 per cent expected it to be worth $3 billion while 8 per cent plumped for $5 billion.

Analysts said M&A activities in the property sector would mostly revolve around housing in big cities like Ha Noi and Ho Chi Minh City and their neighbouring provinces.

In fact, many developers have increased their land holdings through M&A projects, with some giant players into M&A projects every year.

Viet Nam Investment Review reported that Novaland Group has spent thousands of billions dong on M&A in recent years.

By the end of 2020 its land holdings had jumped to 5,400ha thanks to the M&A activities.

A Novaland executive, speaking at an M&A event last year, said his company had spent nearly $1 billion on acquiring lands in Dong Nai Province.

In 2020, The Group earned thousands of billions dong from selling projects, he said.

This year, according to Viet Nam Investment Review, Novaland plans to sell a major project in Ho Chi Minh City to a giant developer from the north and a company in Ho Chi Minh City after hitting the expected profit figure.

This M&A proposal is valued at about VND 40 trillion, and will fetch the company a profit of VND 8 trillion.

The deal will be completed this year and the payment will be made in 2022.

The profit will be used to develop its three big hospitality projects, NovaWorld Ho Tram, NovaWorld Phan Thiet and Aqua City.

Novaland’s annual report said the company possesses nearly 700ha of land in Ho Chi Minh City , 100ha in the east, enough to develop an urban area like Lakeview City.

According to experts, in addition to housing, industrial property will be another sector in which there will be numerous M&A deals this year.

A note from property consultant Savills said in May the M&A market saw some major deals with Hong Kong and Singapore investors pouring money into Quang Ninh and Bac Giang provinces.

Another M&A deal involved ESR Cayman Ltd, a real-estate logistics platform in the Asia Pacific, and BW Industrial Development Joint Stock Company, for developing the 240,000sq.m in the My Phuoc 4 Industrial Zone.

The KCN Viet Nam Industrial Joint Stock Company has paid US$300 million to buy 250ha of industrial land.

An analyst at CBRE said M&As are continuing in property market as clearly shown by the fact that many local and foreign investors have become shareholders in real estate companies.

Experts said the property market retains its potential for high profits and would continue to develop.