Significant real estate deals remain on shelf

VietinBank a fortnight ago shocked the market with a list of nearly 400 secured assets for sale at a total value of more than $330 million.

The list of assets to be sold includes over 350 real estate properties and almost 40 vehicles or pieces of equipment. They will be auctioned or sold off after negotiations.

Significant real estate deals remain on shelf, illustration photo/ Source: freepik.com

In addition to residential houses and land plots, the lender is also selling a series of 4-star and 5-star hotels, homestays, and villas in Hoi An, Danang, Nha Trang, and Cam Lam.

Several other banks are also promoting debt sales worth millions of dollars, such as Agribank, BIDV, and Sacombank.

In February, Sacombank saw 18 assets secured by property rights at Phong Phu Industrial Park in Binh Chanh district of Ho Chi Minh City for auction. The project spans 134 hectares, including land for developing industrial, houses, supermarkets, and hospitals.

Some businesses have spent heavily to seek opportunities to expand and improve profit margins. However, the number of successful transactions are still few, industry insiders noted.

The difficult economic situation has forced companies to focus on their core business and only move forward with small- and medium-value deals. Meanwhile, there are very few domestic real estate developers who can still arrange capital flows to buy in the context of reduced liquidity and high financial costs.

According to Nguyen Quoc Anh, deputy general director of batdongsan.com.vn, despite huge supply with hundreds of projects being on sale, eligible projects with the right conditions for transfer are limited.

“Potential investors are willing to put down money and demand is large, but the number of successful deals remains modest. Big merger and acquisition (M&A) deals are not yet present, but a wave could certainly appear towards 2024,” Anh said.

Vietnam Association of Realtors (VARS) data shows that the number of foreign groups interested in learning about M&A in real estate projects here is still increasing, mainly from Singapore, South Korea, Taiwan, Japan, and Malaysia. However, most of the potential new deals are still in the process of appraisal or negotiation.

In addition, legal bottlenecks mean many projects cannot see transactions even if their owners are eager to make a deal.

To ensure successful M&A deals, VARS recommends competent bodies create better conditions for investors who do not have enough resources to transfer the entire or a part of their projects, if they have already cleared land and completed compensation activities.

It also said that the demand for real estate M&A is currently high. In the market, there are about 1,000 projects delayed due to different reasons and waiting for legal issues to be resolved. Many of those owners have exhausted their internal resources, and transferring projects to restructure their financial status would be a crucial way for them to survive in the coming months, it added.

Foundations being laid for 2024 real estate rejuvenation Although the real estate market has not yet overcome the current downturn, it is hoped recent government policies are gradually removing difficulties to open up more opportunities for developers, investors, and home buyers over the next few years.

International investment continues to flow into Vietnamese real estate During the first six months of 2023, foreign direct investment inflows concentrated primarily on industrial real estate and a few large ventures.