What has been the impact of M&A on the real estate market recently?

September 12, 2023

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Through the first quarter of 2023, the market has seen rays of light on M&A activities in the real estate sector. There is information that investor CapitaLand Group is negotiating a deal worth about 1.5 billion USD with Vinhomes. Although this deal has not been confirmed by both sides. But it is still one of the rays of light signaling that the real estate market is gradually “hot” again.

1. M&A activities will be promoted more than last year.

In recent years, investors Gamuda Land and CapitaLand have become emerging “stars”. On the M&A race in the real estate sector in Vietnam.

In 2022, Gamuda Land completed 2 major deals. Including the acquisition of the entire Uni Galaxy Project (Binh Duong) worth VND 1,300 billion. And merged a domestic company to own the Elysian Project in Thu Duc City. Vietnam’s position is increasingly strengthened. Vietnam is the foreign market with the largest contribution to total revenue in 2022 for Gamuda Land. In the next 5 years, Gamuda Land aims to launch 10-15 new projects.

Last February 2023. Khang Dien Group and Keppel Land Vietnam also signed a memorandum of understanding. To mark the cooperation in developing residential projects and sustainable urban areas in HCMC.

According to real estate market research by Real Capital Analytics Company. There were 05 real estate M&A transactions in Dong Nai, Bac Giang, Bac Ninh, Vinh Phuc, and 02 development land plots in Ho Chi Minh City and Gia Lai. With the total value of announced transactions estimated at more than 100 million USD.

This shows that new investors wanting to participate in the real estate M&A market are returning.

2. Opportunities and advice for businesses with financial potential

Since October 2022, the real estate market has slowed down. However, foreign investors who have previously invested capital in Vietnam are still very persistent with their strategy.

For the housing segment, many domestic real estate businesses are in decline. As a result, a series of real estate projects were frozen. And after periods of hot growth, along with some capital difficulties for many investors. The demand for project transfer will continue to be strong for many years to come. This is an opportunity for businesses with financial potential to conduct “acquisitions”.

As recommended by real estate consultants. Before determining the level of acceptance of the transaction structure and signing the contract. Investors need to perform thorough due diligence at both the project level and the company level. In all aspects of legal, financial and tax matters. Investors should work with a local investment advisor to leverage their local knowledge. That will bring benefits to investors when implementing their projects.

(Refer to the source of Investment Newspaper No. 37, Monday, March 27, 2023)