M&A in Vietnamese real estate heat up

Illustrative image (Photo: baodautu.vn)

The market is witnessing a significant number of mergers and acquisitions as large corporations and investment funds quietly acquire real estate businesses and projects in Vietnam.

Recently Nova F&B - an affiliate of NovaGroup which specialises in cuisine services in projects developed by Novaland, has been acquired by a Singapore enterprise via arrangements with VinaCapital.

It is known that Nova F&B owns 18 famous brands, including self-developed ones like Dynasty House, Phindeli, Mojo Boutique Coffee, Shri Restaurant & Lounge. Some others such as Jumbo Seafood, Sushi Tei, Gloria Jean’s Coffees are developed through franchise agreements.

The move took place at a time when NovaGroup is carrying out a comprehensive restructuring plan. According to the latest announcement, NovaGroup has registered to sell 136.4 million NVL shares of Novaland Group to rebalance its investment portfolio and support the restructuring of other debts and obligations. It came shortly after the company announced the sale of 14.4 million NVL shares out of the total registered units of 69.6 million.

Earlier, Novaland Group swapped shares worth 1 trillion VND (43.4 million USD) in its two affiliate companies to Dallas Vietnam Gamma Ltd.

In a recent announcement, Jones Lang Lasalle (JLL) stated that they have advised on the sale of an investment portfolio consisting of three prominent hotels in Southeast Asia, including two in Vietnam. The deal valued at 106.1 million USD, marking the first hotel purchase transaction in the region this year.

If the market conditions continue to be challenging, 23% of enterprises could only sustain their operations until the end of the third quarter while 43% of others could survive till the end of this year, according to a survey recently released by the Vietnam Association of Realtors (VARS).

Experts held that the Vietnamese real estate market remains attractive for domestic and foreign investors. However, the difficult economic situation has prevented them from investing in large-scale deals and forced them to focus on small and medium-scale ones.

Meanwhile, there are only few domestic financially-strong developers amid decreased liquidity and high financial cost. Therefore, big deals are expected to be open to foreign investors.

Illustrative image (Photo: moitruongvadothi.vn)

Data from the VARS shows that the number of foreign investors interested in M&A property projects in Vietnam is increasing sharply, especially those from Singapore, the Republic of Korea, Taiwan (China), Japan and Malaysia. However, the majority of them are on the verification and negotiation processes.

As negotiations last one to one and a half years, a significant number of successful deals will emerge at the earliest by the end of 2023 or the beginning of 2024, said an expert from Savills./.