Overseas property developers have been increasingly involved in mergers and acquisitions (M&a
mp;As) of landmark buildings and projects in Ho Chi Minh City
, the main engine of Vietnam’s economy, amid loosened regulations on foreign ownership and rising demand for housing of all segments.
Through its affiliate Saigon Boulevard Holdings Pte. Ltd, Mapletree Investments Pte, a property developer also from Singapore, has acquired Kumho Asiana Plaza, a landmark building in downtown HCM City, for $215 million.
The property, where U.S. President Obama stayed during his Vietnam visit in May, was equally co-owned by from Asiana Airlines Inc. and Kumho Industrial Co.
New Life RE has purchased four-star Duxton Hotel Saigon from Singapore’s Low Keng Huat in a deal worth $49 million.
The four-star hotel, which is located on Nguyen Hue Boulevard in the heart of Ho Chi Minh City, has 191 luxurious guest rooms and suites, 16 meeting rooms and a wide range of amenities.
Duxton Hotel Saigon in downtown Ho Chi Minh City. Photo: www.vietnamimpresstour.com
In March this year, CapitaLand Vietnam acquired the Thao Dien Plot from a Vietnamese company for an undisclosed value.
According to Jones Lang LaSalle Vietnam (JLL), the most notable transaction in the first quarter of this year was the deal between Singapore’s Keppel Land and the owners of Empire City in District 2, Ho Chi Minh City. Keppel Land acquired 40% interest for $93.9 million in the project.
Investors from Japan, South Korea and Singapore continued to show strong interest in M&As in Vietnam’s real estate sector, said the U.S.-headquartered real estate service firm.
“In line with our forecast, M&A activities continue where it left off in 2015 with deal volumes increasing in the first three months of 2016 and many successful transactions,” the firm said.
M&A activities are expected to increase through 2016 with more transactions over the remaining of the year thanks to the combination of improved property market, positive change in legislation and soft conditions in other countries in the region, said JLL.
“A safe and stable political situation and economic growth rate are also advantages for the Vietnam market. Therefore, I think that foreign real estate investors would consider and be aware of Vietnam as a new market for investment,” said Tram Nguyen, research manager at JLL Vietnam.
Similarly, Savills Vietnam
expects the recent interest from investors to continue, with a number of further hospitality transactions due to complete in 2016.
Savills Vietnam has noted the fact that Vietnam has one of the fastest growing tourism destinations in Southeast Asia lately has driven the entrance of international hoteliers, a rapid increase in direct flights, an improved visa policy and investment into key infrastructure.
As demand increases, investors have demonstrated growing interest in the hotel market. Hospitality development throughout the country kicked off with fervor in 2015 and will deliver world-class products, supported by great coastal locations, quality golf courses, world heritage sites and international architecture.