Real Estate M&As in Vietnam Likely to Reach Records in 2017-2018: JLL

Tuan Minh

10:59 12/07/2017

BizLIVE - Vietnam's vibrant economy continues to drive strong focus from real estate developers from Asia such as Singapore, South Korea and Japan.

Real Estate M&As in Vietnam Likely to Reach Records in 2017-2018: JLL

Vietnam is expected to see record M&A activities in the real estate sector. Photo: Internet

Strong appetite for Vietnam from regional investors is expected to send mergers and acquisitions (M&As) reaching record levels in 2017 and 2018, U.S.-based real estate services firm Jones Lang LaSalle (JLL) has said in a report.
Vietnam has become an attractive destination for many foreign investors largely due to the country’s friendly policies encouraging foreign direct investment (FDI), its political stability and strong economy.
As Vietnam remains one of the most favorable destinations for foreign investment in Southeast Asia, the level of FDI has continued to grow year-on-year due to these strong fundamentals with newly registered FDI to $19.2 billion in first half of the year, representing a rise of 54.8% y-o-y.
Real estate continues to be one of the most appealing sector, attracting $701.6 million in fresh capital in the January-June period, bringing the tally to $51 billion so far.
In 2017, a vibrant real estate market will elevate the number of merger and acquisition to a new record, JLL said. The Vietnamese real estate market continues showing irresistible appeal to foreign investors, mostly through merger and acquisition.
Joint ventures have become popular among foreign developers who have strong financial capacity and track record joining forces with local developers who own land and have strong connection with the local community.
“There are hundreds of million dollars waiting to be poured into the market in most segments including residential, office, retail, hospitality and industrial. Investors are from many different countries such as Japan, Korea, Singapore, with an increasing number of groups from mainland China,” said JLL in a report.
The real estate services company expected continued growth through most asset types. Hospitality has been interesting over the past year with new funds with foreign capital now specifically targeting this sector.
“We expect that this trend will continue in hospitality, and in other growing sectors such as industrial and alternatives like education. The affordable housing market is another key growing sector, now drawing specialist capital sources who identify value in these underlying fundamentals including growing middle class,” it added.
From the start of this year, foreign property firms such as Keppel Corporation, Indochina Group, CapitaLand, VinaCapital and Lotte were active in acquiring land plots and development projects in Vietnam.