Support from legal factors
According to the M&A (mergers and acquisitions) market, since the beginning of the year, there have been dozens of real estate M&A deals. The most valuable deal was Vingroup transferring 55% of the charter capital at SDI Investment and Trade Development Company Limited with a total transaction value of 982 million USD. SDI is known as an indirect major shareholder of Vincom Retail.
Next, the deal between Becamex IDC transferring the Tan Thanh Binh Duong urban and housing project to Sycamore Limited Company, with a value of up to 554 million USD. Or the deal between Electronic Tripod Vietnam Company Limited and Sonadezi Chau Duc Joint Stock Company signed a land lease contract at Chau Duc Industrial Park with a total value of 250 million USD.
According to data from the Vietnam Association of Realtors, the average value of real estate M&A deals in the first 9 months of 2024 reached the highest level in the past 6 years. And at least double that of 2023.
Commenting on the real estate M&A market, Mr. Nguyen Van Dinh - Vice President of the Vietnam Real Estate Association (VNREA) - said that recently, along with the Land Law (amended) and the Housing Law (amended), the Real Estate Business Law (amended) has officially come into effect. These laws have changed the conditions for M&A activities of projects that need to be transferred on the market.
The expert analyzed that previously, the 2014 Law on Real Estate Business stipulated that a land use right certificate was required for transfer, but under the new law, this is no longer required. As long as the land is clean, the legal procedures can be transferred as is. In addition, the provisions in the Law on Real Estate Business (amended) also help to resolve many other issues.
"With the new law, the upcoming game in the real estate market will only be for those with real capacity. Weak investors will be screened and eliminated. I think this will be a very big screening. The real estate M&A market in the period of 2025 - 2026 is expected to be very exciting with more diverse and quality products," said Mr. Dinh.
Real estate and industrial parks are the focus
Commenting on the attractiveness of the Vietnamese market to foreign investors, Ms. Tran Thi Khanh Linh - Deputy Director of Savills Investment Consulting Department - said that the Vietnamese market has always been a place with high growth opportunities with sustainable FDI flows, strongly developing infrastructure, thereby increasing demand for most real estate segments such as housing, industry, commercial offices, etc. This contributes to the attractiveness of the Vietnamese market to investors.
“The simultaneous entry into force of laws related to the real estate market in August has created confidence among investors in a stable and transparent legal environment, helping to shorten legal approval time, helping investors clearly determine initial investment costs (land use costs), thereby making real estate investment projects more attractive,” said Ms. Tran Thi Khanh Linh.
According to the expert, investors now have many opportunities to M&A potential projects or cooperate with local partners to develop large projects. Diverse market demand attracts different investment tastes.
“The demand of foreign investors for real estate is still very large, not less than the demand for industrial park and office projects. Foreign investors always require real estate projects to have clear legal status and be ready for development,” Ms. Linh shared.
According to experts, in the context of limited supply of residential real estate projects, foreign investors are shifting to industrial park and office projects, which are projects in operation, have clear legal status and are ready, making it easier to conduct M&A.
