Many foreign investors interested in M&A deals in real estate market: VAR

Illustrative image (Source: Vinhomes)

There has been a surge in the number of foreign investors interested in merger and acquisition (M&A) deals in the Vietnamese real estate market, which is a hope for Vietnamese property developers amid the current capital thirst, according to the latest market research released by the Vietnam Association of Realtors (VAR).

According to the research, in early 2022 when monetary policies in Vietnam was loosened strongly with high credit growth and decreased interbank interest rates, M&A activities bustled with a series of large deals.

In the first quarter of 2022, the total value of M&A transactions was higher than those recorded in a year in the 2019-2021 period, it said.

Experts held that the real estate market of Vietnam has still been 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 real estate developers having the capital capacity for property purchase amid decreased liquidity and high financial cost. Therefore, big deals are expected to come from foreign investors.

Data from the VAR showed that the number of foreign investors interested in M&A projects in the Vietnamese real estate sector is increasing sharply, especially those from Singapore, the Republic of Korea, Taiwan (China), Japan and Malaysia. However, the majority of the deals are on the verification and negotiation processes.

Along with difficulties during negotiations, there are still some obstacles hindering M&A activities, including legal conditions which prevent many projects from being acquired as they fail to meet the conditions./.