Vietnam has become one of the most favored destinations for foreign property investors in the development of mergers and acquisitions (M&As), said real estate services provider Savills Vietnam in a statement on July 27.
In the first half of this year, Vietnam’s economy expanded 7.08% year-on-year, marking the highest first-half growth since 2011. Thanh Tho reported on Saigon Times.
The local real estate sector continued receiving robust interest from foreign investors, ranking first in the contribution to foreign direct investment (FDI) registration, with US$4.97 billion, according to Savills Vietnam.
The consultancy firm said that the smart city project in Hanoi City accounted for the majority of this funding.
Covering 271.82 hectares, this mega project is jointly funded by four local companies and Japan’s Sumitomo Corporation. The first phase is planned to start in the third quarter of this year and will be developed by a Sumitomo-BRG Group joint venture.
Once completed, the smart city is expected to be one of the most advanced smart cities in Southeast Asia, with a modern transport system.
Savills Vietnam said the property market in HCMC also witnessed strong interest from major players during this quarter.
Frasers Property entered into a conditional share purchase agreement to acquire 75% of the shares issued by Phu An Khang Real Estate, which owns a mixed-use development plot in District 2, for some US$18 million in April.
In early June, Malaysia’s Berjaya Land Berhad announced their proposed disposal of the Vietnam Financial Center project to Vinhomes and its affiliates for roughly US$39 million, following Vinhomes’ capital contribution of nearly US$88 million to the project back in March.
Upon completion of the transaction, Vinhomes and its affiliate will fully own the 6.6-hectare project in District 10 for mixed-used development. In addition, they have also injected some US$522 million as capital contribution, giving them a 99.2% stake in the 925-hectare Vietnam International University Town project, and are in the process of acquiring the remaining 0.8% stake from Berjaya.
Meanwhile, the residential sector was still the focus of local players. Xuan Mai Corporation successfully acquired Eco-Green Saigon, a 14-hectare project in District 7.
Nam Long Group continued their cooperation with Japanese investors, Hankyu Hanshin Properties Corporation and Nishi Nippon Railroad, to develop Akari City, an 8.8-hectare residential project in Binh Tan District.
Besides this, Nam Long also kicked off their key project, Waterpoint Township, in the neighboring province of Long An in June. Covering 355 hectares, Waterpoint consists of townhouses, villas, high-rise apartments, a mixed-use complex, a hospital, and education and sports facilities.
The second quarter of 2018 also recorded the notable initial public offering of Vinhomes JSC, the residential property development arm of Vingroup, drawing strong interest from domestic and foreign investors, including GIC, who acquired a 5.74% stake as Vinhomes’ cornerstone investor.
Aside from the positive outlook for the residential sector, Savills expected outstanding M&A performance from both the industrial real estate and office sectors. The industrial sector is fuelled by growing FDI being poured into manufacturing, improved infrastructure and a competitive outlook compared with other countries in the region.