A large number of Japanese businesses are taking risks to conduct mergers and acquisitions (M&a
mp;As) in Vietnam’s real estate market, said Masataka Sam Yoshida, senior managing director of Recof, at a conference on M&A held in Ho Chi Minh City last week.
Vietnamese real estate is catching strong attention from Japanese investors who were not interested in this sector some two decades ago, Yoshida noted, adding that Nippon enterprises are taking risks to invest in it, not only in Hanoi, Ho Chi Minh City, but also in central Vietnam.
“This [real estate] is the sector that Japanese investors did not care about at all, but the trend has been reversed and it has become a boom,” Yoshida added.
Japanese investors are well-known for being conservative, prudent and risk-averse. They have recently see Vietnam’s real estate market risky due to unreal prices and speculation, according to the Saigon Times Online newspaper.
According to Yoshida, the upward trend of M&A deals in Vietnam by Japanese companies started in 2015 and has continued into 2016. This is due to the “golden” demographics and rising purchasing power in the Southeast Asian country.
Industry insiders see Vietnam’s realty market more attractive than those in some other countries thanks to the rebound over the past three years.
Sanyo Homes Corporation has been the latest Japanese to join Vietnam’s property market. It entered a partnership with Vietnamese developer Tien Phat Corp. in May to develop a $25-million project in Ho Chi Minh City.
Before Sanyo Homes, Creed Group and Vietnamese partners An Gia Investment Company and Phat Dat Corp. poured $500 million into a residential project in HCM City
’s District 7. Phat Dat paid 50% of the project’s capital while Creed Group and An Gia hold 25% stakes each.
A consortium of Hankyu Realty Co. Ltd, Nishi-Nippon Railroad Co. Ltd and Nam Long Investment Corp., an affordable house developer in Vietnam, are developing a project in HCM City’s District 9. The project is the second that the three companies have jointly developed.