Merger and acquisition (MA) deals in the real estate market are on
the rise. Economic experts were quoted by the Vietnam Business Forum
Magazine (VBF) as saying that the prolonged lacklustre property market
had provided plenty of MA opportunities for companies with strong
financial resources.
The sharp increase in MA property deals
during market recovery has reflected the strong pull of the real estate
market. Opportunities are in the hands of companies with strong
financial capacities, according to VBF.
The National Housing
Organisation (NHO), a joint venture between TAG Joint Stock Company and
NIBC Investment Company Limited, invested nearly 1 billion USD, an
equivalent to 21 trillion VND, to control many property projects owned
by various companies in major cities and provinces like Hanoi, Ho Chi
Minh City, Da Nang and Binh Duong.
Licogi 16 Joint Stock Company
also transferred its Sky Park Residence Project in Hanoi to Thanh Hoa
Construction Corporation for 143 billion VND. And, the success of many
big MA deals has caught the attention of public. For instance, FLC
Group purchased ION Complex Project at a prime location in Hanoi from
Hai Phat Investment Joint Stock Company.
Phan Xuan Can, President
of Soho Vietnam Real Estate Consulting Company, said, in spite of still
being in difficulty, property transfers have never been ever eventful
as now, especially when the real estate market has shown signs of
recovery. Many companies with strong financial bases have rushed to take
over projects at the most reasonable values.
According to
experts, together with the revival of the property market, deals have
started to increase and market liquidity has gradually improved. Many
people have become more interested in real estate projects while owners
have ended their stop-loss sales. Hence, many companies envisaged the
solid recovery of the property market and they rushed to acquire
investment projects.
Investors are offered projects with very
attractive prices. They do not have to conduct time-consuming paperwork
and deal with complicated troubles arising from land clearance and
compensation. Instead, they can start doing business immediately.
However,
transfers are not always easy because new owners have to spend much
time and effort to contact and connect old partners and build up the
trust with them to continue their projects smoothly. They also have to
review all customers to have satisfactory explanations to continue
fundraising activities and property handovers in the future.
Marc
Townsend, Managing Director of CBRE Vietnam, said MA is not
actually the solution to deal with inventories but it is a good
opportunity for businesses to perform restructuring, continue their
projects and even develop new ones.
“Not all MAs are
successful. Buyers have many options and they only pick up good ones.
Besides, price is sometimes not the deciding factor but the similarity
of development orientations between buyers and sellers. Indeed, MAs
depend on many factors like price, location, legality and insider
sentiment,” he stressed.
According to economists, MAs have
helped the market to remove ailing businesses and make experienced,
strong businesses more powerful. This benefits the real estate market
and homebuyers in the long term, and strengthens market stability.-VNA