Property acquisitions market expected to heat up in H2

By Anh Tu   June 9, 2024 | 05:30 am PT
Property acquisitions market expected to heat up in H2
Properties along the Hanoi Highway in HCMC's Thu Duc City in February 2024. Photo by VnExpress/Quynh Tran
The property industry will likely see more mergers and acquisitions during the second half of this year as businesses need funds to restructure debts, brokerage MB Securities has said.

Many property developers lack resources and access to capital while their costs are rising, it said.

Selling projects to other investors would help them maintain their operations, it said.

U.S. interest rates have been less volatile, making it easier for foreign investors to fund M&A deals, it added.

Su Ngoc Khuong, a senior director at property consultancy Savills Vietnam, said residential projects in Vietnam would attract experienced foreign investors.

They are also eyeing segments that could generate immediate cash flows such as resort real estate, shopping malls and office buildings, he said.

"But these segments typically take 10-12 years to break even, and so usually attract investors with medium- to long-term plans to invest in the Vietnam market."

The real estate markets in HCMC’s satellite areas such as Binh Duong, Dong Nai and Long An provinces are considered lucrative for their ample supply of lands, low prices and excellent infrastructure.

Meanwhile, local developers are also gearing up to buy lands with funding from M&A deals.

At its annual general meeting last month developer An Gia announced plans to acquire one or two property projects every year in HCMC, Binh Duong, Long An, and Dong Nai.

Trang Bui, CEO of real estate services firm Cushman & Wakefield Vietnam, forecast domestic businesses to make a comeback in the M&A market this year after it was dominated by foreign investors in 2023.

So far this year the property sector has not seen any large or high-value M&A deals unlike last year when foreign developers were spending millions of dollars to acquire projects from domestic firms.

They included Malaysian developer Gamuda which bought a project in HCMC’s Thu Duc City for over $300 million last May.

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