HCMC, Hanoi main locations for hotel acquisitions in Vietnam

By Vu Le   August 29, 2018 | 10:46 pm PT
HCMC, Hanoi main locations for hotel acquisitions in Vietnam
A hotel area in downtown HCMC. Photo by VnExpress/Vu Le
HCMC and Hanoi are the main markets in Vietnam for mergers and acquisitions in the hospitality industry.

Since 2006 Ho Chi Minh City has accounted for 25 percent of all M&A deals, followed by Hanoi with 23 percent, according to data from Jones Lang LaSalle (JLL), an American real estate services and investment consultancy.

Da Nang and Phan Thiet, the two resort cities on the central coast, accounted for 7 percent each, and Phu Quoc Island and mountain town Da Lat for less than 3 percent each.

Other tourist destinations such as Hai Phong, Quy Nhon, Con Dao, Sa Pa, Hue, An Giang, and Can Tho accounted for around 1.4 percent each.

The decade from 2007 witnessed a series of hotel M&A deals in HCMC, mostly in the downtown area and nearby Tan Son Nhat International Airport.

Some of the names on the list are Indochine Park Tower, Movenpick Saigon, Riverside Serviced Apartments, New World Saigon Hotel, Renaissance Riverside Hotel Saigon, Novotel Saigon Center, Duxton Hotel Saigon, Intercontinental Asiana Saigon, Le Meridien, and Senla Boutique.

In 2016 Singapore-based property developer Mapletree Investments Pte bought out the InterContinental Asiana Saigon Hotel along with the Kumho Asiana Plaza, a landmark building in the downtown area, from South Korea’s Asiana Airlines Inc. and Kumho Industrial Co. for $215 million.

The hotel costs $74.9 million and was one of the 10 biggest hotel M&A deals in the first half of that year in the Asia-Pacific.

Analysts said Vietnam, especially HCMC, Japan and Australia are the most attractive markets for hotel M&A deals in the region.

In the past decade most deals in HCMC and Hanoi have involved foreign investors.

In its outlook report for M&A released at the 2018 Vietnam M&A Forum in HCMC earlier this month, KPMG said the most promising sectors for mergers and acquisitions in Vietnam are consumer goods and real estate.

The global advisory firm noted that foreign investors are interested in M&A because it often takes long to complete procedures for new real estate projects in Vietnam, and acquiring local firms is a shortcut.

Besides, the availability of land for new projects is limited, with local firms already buying up most of them, making it difficult for foreign investors to strike out on their own.

The total M&A value in Vietnam last year was $10.2 billion, the highest ever and 175 percent up from 2016, with consumer goods and real estate accounting for 57 percent and 27 percent.

In the first half of this year the figure was $3.55 billion, with real estate surging to the top to account for 66.75 percent followed by finance-banking with 19 percent.

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