M&A activity in the real estate sector in Vietnam has been thriving in the first half of 2024, according to the Vietnam Real Estate Brokers Association (VARS). The frequency and scale of these transactions continue to grow, involving financially strong enterprises, both domestic and foreign, within and outside the industry.
Investors tend to seek out and acquire residential real estate projects or large plots of clean land in suburban areas or provinces and cities neighboring major urban centers such as Hanoi and Ho Chi Minh City, to develop complex housing projects.
Industry experts predict that the second half of 2024 will witness an even stronger wave of real estate M&A activity, as three pivotal laws with far-reaching implications for the real estate market come into effect on August 1, 2024. These laws are expected to resolve longstanding issues, unblocking resources for new projects and bringing greater transparency to the real estate market, thereby harmonizing interests and improving state management of land.
Mr. Tran Ngoc Liem, Director of VCCI-HCM, affirms that the enactment of these three pivotal laws pertaining to the real estate market, including the Land Law of 2024, the Housing Law of 2023, and the Real Estate Business Law of 2023, marks a significant turning point, offering new opportunities for the real estate sector in particular and the economy as a whole.
Ms. Nguyen Truc Hien, a member of the Vietnam International Law Firm (VILAF), points out that legal barriers have been a significant hindrance to M&A activities in the past. However, comprehensive changes in regulations will now make it easier for investors to compensate and clear land for projects. The market-based land pricing will increase, benefiting landowners and reducing challenges for investors during the compensation process.
The Land Law of 2024, according to Ms. Hien, will grant foreign investors additional rights, such as the ability to acquire land use rights in industrial parks, industrial clusters, and high-tech zones. Foreign-invested enterprises will also have expanded options for obtaining land use rights, including through the acquisition of real estate projects. These more liberal regulations present an opportunity for Vietnam’s real estate market to attract a new wave of M&A activity in the coming period.
The Ho Chi Minh City Business Association (HUBA) also acknowledges the significant impact of the upcoming laws, expressing confidence that their implementation will resolve bottlenecks in mechanisms and legal issues, encourage more efficient use of land resources, and provide a more reasonable basis for compensation, land clearance, and financial obligations to the state.
Despite the challenges in M&A project procedures, financially strong investors have been quick to seize opportunities. One notable domestic player is KITA Group, which has acquired a clean and legally compliant project portfolio, including KITA Airport City in Can Tho, KITA Capital within the Nam Thang Long – Ciputra urban area, a premium project within the Golden Hills mega-project in Danang, TAX Resort and Hoa Lac urban area in Hanoi, and the upscale Sakura Golf project in Hai Phong.
Recently, KITA Group commenced construction on the Stella Icon apartment project within KITA Airport City and is finalizing procedures to hand over land use rights certificates to customers who have purchased products within the project’s subdivisions. This marks a significant step forward in the project’s implementation since the acquisition.
Mr. Nguyen Duy Kien, the founder of KITA Group, shared that the company is committed to its mission of “reviving” projects through M&A activities, aiming for sustainable real estate development with transparency and legal clarity. KITA Group strives to create architectural landmarks that are distinctive in design and functionality.
KITA Airport City, developed by KITA Group in Can Tho City
Other prominent domestic enterprises, such as Vinhomes, Eurowindow, Ecopark, TNG Holdings, and Hung Thinh, are also actively developing projects on large land funds ranging from 50 to 150 hectares in Lam Dong, Long An, Hai Phong, and Binh Thuan provinces.
As for foreign investors, long-standing names in Vietnam like Keppel Land, Capital Land, and Gamuda have already accumulated their own land funds, giving them an advantage. These giants have been continuously acquiring clean land and launching large condominium and urban area projects in Hanoi and Ho Chi Minh City.
These investors are now eyeing opportunities in the office building and retail real estate sectors, which offer returns of 7-8%/year. Compared to surrounding countries, where returns from real estate investment hover around 2-3%/year, Vietnam’s 8-10%/year returns are highly attractive.
From the end of 2023 to the first half of 2024, approximately 16 real estate M&A deals were recorded, according to Ms. Trang Bui, General Director of Cushman & Wakefield Vietnam. Investors remain focused on seeking clean land with good quality, genuine value, and complete legal documentation, as well as high development potential.
Ms. Nguyen Thi Van Khanh, a JLL Vietnam expert, notes that M&A is no longer just a game of asset accumulation. Domestic enterprises can leverage this strategy to enhance their internal strength and competitiveness.
In summary, Vietnam’s real estate M&A activities remain attractive to foreign investors, while domestic enterprises are optimistic about the upcoming laws’ potential to resolve longstanding issues. In anticipation of long-term plans, the accumulation of land funds by domestic enterprises continues to be a priority.
The most extensive bribery case ever in Thanh Hoa: Numerous suspects prosecuted for “Giving and Receiving Bribes”
The Provincial Security Investigation Agency (PSIA) of Thanh Hoa province announced on January 31st that it has made the decision to initiate a prosecution against 23 individuals in connection with the offenses of “Accepting bribes” and “Giving bribes” as stipulated in Article 354(3) and Article 364(2) of the Criminal Code.
Accelerating disbursement of the 120 trillion VND credit package for social housing
Deputy Prime Minister Trần Hồng Hà has recently issued directives regarding the implementation of the 120,000 billion VND credit package for investors and buyers of social housing, workers’ housing, and projects for the renovation and construction of apartment buildings.
Astonishingly high price for old and dilapidated apartment buildings reaching nearly 200 million VND/m2, rivaling the most luxurious condominiums in Hanoi
Old collective apartments with prices starting from 100 million VND/m2 are usually the first-floor units that can be used for commercial purposes, while the upper-floor units are priced at 60-80 million VND/m2 for residential purposes.
“Prosecution of government officials, land registration officers, and tax department employees in the largest bribery case ever”
The Thanh Hoa Police Investigative Agency has initiated legal proceedings against 23 individuals involved in the crimes of “Bribery” and “Receiving bribes”. This is the largest bribery case in terms of the number of suspects ever discovered and apprehended by the Thanh Hoa Police.
