HCMC – Foreign involvement in property projects in Vietnam surged in the last quarter, mainly through mergers and acquisitions (M&A), according to a report by Savills Vietnam.
In May, Thailand-based Hemaraj Land and Development Public Co Ltd and Civil Engineering Construction Corporation No. 4 (CIENCO 4) of Vietnam jointly established a 3,200-hectare industrial park with a total investment of US$1 billion.
China Fortune Land Development Co Ltd spent US$65.3 million taking over the 198.5-hectare Lotus Dai Phuoc project of VinaCapital in Dong Nai Province.
VinaCapital transferred a 65% stake worth about US$41 million in the Times Square project in Hanoi to Elite Capital Resources Limited.
Japanese investors were operating actively in the local property market as well. Nishi Nippon and Hankyu cooperated with Nam Long to develop a 26-hectare Mizuki Park residential area capitalized at US$351 million in Binh Chanh District.
Aeon Mall, a famous Japanese retailer, also tied up with BIM Group to build Aeon’s second shopping mall in Hanoi. Covering an area of 16.7 hectares, the project requires US$200 million.
Son Kim Group received US$100 million from a Japanese investor to implement its projects.
In May, Hong Kong Land successfully bought a 64% stake in HCMC Infrastructure Investment JSC (CII) to develop residential projects at Thu Thiem New Urban Area.
The long-stalled Saigon One Tower project in District 1, HCMC was also transferred to Alpha King Real Estate Development JSC.
Investors of projects in Hanoi and HCMC are now less independent on bank loans thanks to capital mobilized from investment funds and partners.
Foreign direct investment (FDI) disbursements totaled US$7.72 billion in the first half of the year, up 6.5% year-on-year, while fresh FDI approvals amounted to US$19.22 billion, increasing 54.8% against the year-ago period, Savills said.
Jones Lang LaSalle (JLL) has forecast that the number of M&A deals in the real estate market will be high in 2017. Foreign investors with strong finances and experiences tend to cooperate with local firms with available land and good relations with authorities.
A large amount of money from Japanese, Korean, Singaporean and Chinese investors will be poured into housing, office, retail, hotel and industrial park development projects in the coming time, JLL added.
Foreign firms invest heavily in property projects
