(DTCK) Many large real estate M&A deals have "lit up" since the end of 2023, signaling a bustling "hunting sea...
(DTCK) Many large real estate M&A deals have "lit up" since the end of 2023, signaling a bustling "hunting season" in 2024.
Excitement since late 2023
In the fourth quarter of 2023, some prominent M&A deals in the real estate sector were announced, such as TTC Hospitality JSC acquiring the Imperial Hotel project in Thua Thien Hue province; CapitaLand (Singapore) purchasing 56,208 square meters of land in the Vinhomes Smart City project in Hanoi; Sycamore Company (Singapore) acquiring 18.9 hectares of land in Binh Duong province... According to experts, these are signs forecasting the vibrancy of the real estate M&A market this year.
Mr. Tran Dai Nghia, a legal policy expert in investment projects and Director of FII Vietnam Consulting and Investment Company (FIIVN), believes that 2024 is the time for enterprises to reassess their existing assets: whether to sell or hold onto them to wait for the effectiveness of new laws (Land Law, Housing Law, Real Estate Business Law...). Therefore, the M&A market will be much more active, especially towards the end of the year.
"When the decrees guiding the implementation of new laws are issued, parties will confidently proceed with transactions. In addition, for savvy investors, just looking at the content of the law can guide them to take appropriate actions," analyzed Mr. Nghia.
Domestic and foreign enthusiasm
Observing the M&A market trends in recent times, it is not difficult to see the attractiveness of the Vietnamese real estate sector in the eyes of foreigners - a force that has always played a significant role in the "shopping spree" in recent years. In fact, since the fourth quarter of 2023, the market has witnessed a large influx of foreign investment into domestic real estate.
For example, HiteJinro - the largest beverage manufacturer in South Korea - invested in a more than 8.2-hectare plant worth over $100 million in Thai Binh province. Another large South Korean enterprise, Hyosung Group, plans to build a fiber and carbon material production plant with a total investment of about $720 million (nearly 17,500 billion VND) in Phu My II Industrial Park, Ba Ria - Vung Tau province. Or Deli Group Limited from China invested $270 million to use 21.2 hectares of land in Dai An Industrial Park expansion in Hai Duong province...
In the retail sector, after Lotte Mall West Lake Hanoi opened with an area of over 354,000 square meters, THISO opened its third Emart supermarket in Ho Chi Minh City and plans to expand further after acquiring 2.4 hectares of land in West West Lake (Hanoi) from THT Development Company Limited (the transaction value was not disclosed, but the project value according to the investment certificate is 554 billion VND).
These developments show that both manufacturing and retail sectors have undergone expansion activities, followed by the shadow of real estate M&A deals.
On the international front, data from market research units indicates signs of recovery in real estate investment. According to JLL, the total investment value in the fourth quarter of 2023 reached $31.6 billion, a 3% growth, thereby ending a seven consecutive quarters of decline.
Mr. Stuart Crow, CEO of Capital Markets Asia-Pacific at JLL, believes that the potential of interest rate cuts in 2024 could reverse the current trend, but we can expect more sector diversification, especially in logistics, industrial, and residential sectors - which have received strong confidence from investors across the region.
According to JLL, 2023 ended with reduced cash reserves, indicating that investors have deployed capital into the Asia-Pacific commercial real estate market and are ready for long-term investments, despite current difficulties. In 2024, challenges will still exist as interest rate fluctuations play a decisive role in investment activities and sales pressures increase in some major markets in the region.
Meanwhile, Ms. Eri Mitsostergiou, Director of Savills World Research, believes that 2024 will be a better year for global real estate investors with sustainable recovery as profits become more attractive, high-end property rents increase, and price adjustment processes begin to affect the expectations of both buyers and sellers.
Savills experts point out that there is widespread similarity in the performance of high-end assets in each segment, but the possibility of political instability in some regions affecting secondary assets cannot be ruled out.
"While not appearing in all regions globally, researchers have emphasized that strong drivers from increasing demand and limited supply are the foundation for significant investment potential in smaller and less liquid sectors such as data centers, lifestyle, and education," added Ms. Eri Mitsostergiou.
For the domestic market, Mr. Phan Xuan Can, Chairman of Sohovietnam's Board of Directors, predicts that in 2024, domestic investors will gradually recover in a low-interest-rate environment, many investors who have overcome difficulties will return to "shopping" as buyers, while foreign capital will still be a force accompanying domestic investors.
Meanwhile, Mr. Dang Huynh Anh Tuan, a member of the Board of Directors of TTC Group, predicts more specifically that tourism and hotels will be sectors experiencing good recovery in the current context. Regarding the acquisition of the Imperial Hotel, this is not only a bold move but also clear evidence of TTC Hospitality JSC's commitment to improving service quality, expanding market segments, and developing product lines.
It is known that before that, TTC Hospitality JSC had carried out a series of large-scale expansion transactions through mergers and acquisitions such as the successful M&A of Thang Loi Tourism Joint Stock Company (the unit owning TTC Hotel - Michelia, TTC Resort - Doc Let, TTC Hotel - Phan Thiet, TTC Palace Binh Thuan at that time); merging TTC Lam Dong with affiliated units including Thung Lung Tinh Yeu, TTC Ngoc Lan Hotel, and TTC Da Lat in 2019, and M&A of other hotels such as TTC Hotel - Hoi An, TTC Hotel - Angkor...
One noteworthy point is that the M&A market for projects in the late 2023 - early 2024 period is showing signs of "competition." Sharing privately with the author, a representative of an investment advisory firm stated that at a project constructing functional areas on land lots C3-CH01, C3-CH02, C3-CH03, C3-CX01, and C3-CX02 in Nam Tu Liem district, Hanoi, after news that the investor wanted to transfer ownership, many large investors participated in negotiations, including an investor from Malaysia, a major real estate developer in Hanoi... and although the project is being loudly publicized as owned by a Singaporean investor, the identity of the ultimate owner has not yet been revealed.
"The gradually recovering market, coupled with improved legal corridors... is making many 'big players' actively hunt and want to take advantage of creating land funds for the coming period, even projects with extremely large total investment amounts are ready to find buyers," the representative of the investment advisory firm said.
Via Tin nhanh chung khoan