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Real estate M&A results outperform estimates

In contradiction to the downturn expectations, mergers and acquisitions in real estate exceeded projections in the last quarter of 2021.



January 21 marked the start of a frenzied few days in the Vietnamese property market with the announcement from GLP, a leading global investment manager and business builder in logistics, data infrastructure, and renewable energy, to establish GLP Vietnam Development Partners I (GLP VDP I) with an investment capacity of $1.1 billion.

GLP VDP I, which will focus on developing modern and environmentally-friendly logistics facilities in Greater Hanoi and Ho Chi Minh City, is seeded with six development sites with a total land area of close to 900,000 square metres. It is set to be one of Southeast Asia’s most significant logistics development funds.

GLP entered the Vietnam market in 2020 through a strategic joint venture with SEA Logistic Partners, an industrial and logistics facility development and operation platform. So far, the two first developments have started construction in Haiphong city in the north and Long An province in the south.

One day later, a Keppel Consortium (Keppel Land Vietnam Properties Pte. Ltd and Keppel Vietnam Fund) announced entering into a binding agreement with Phu Long Real Estates JSC and its subsidiary An Khanh New City Development by acquiring 49 per cent interest in three residential land plots in Mailand Hanoi City, Hoai Duc district, for an aggregate consideration of approximately $118 million. The three sites, totalling 14.2 hectares, comprise two land plots zoned for landed housing development and one plot for a high-rise condominium.

Upon completion of the transaction, which is expected to take place by Q3, the Keppel Consortium and Phu Long plan to jointly develop a total of about 1,260 homes, featuring approximately 1,020 condominium apartments and 240 landed homes. The total development cost for the project, inclusive of land cost, is expected to be approximately $500 million.

Joseph Low, president of Keppel Land Vietnam, said that the company has deepened its presence in Vietnam by reentering the fast-growing capital city of Hanoi with its strategic partner, Phu Long, an established local developer.

“We aim to continue delivering innovative and multi-faceted urban space solutions. We believe that there is strong demand for thoughtfully designed and high-quality homes amongst discerning homebuyers in Hanoi,” Low said.

On January 24, Viva Land Investment and Development JSC acquired Capital Place – a premier Grade A luxury building in Hanoi, thus paving the way for the company to deepen its footprint in the Vietnamese luxury realty market in the forthcoming decade.

Capital Place is the first commercial project under Viva Land’s operation and management in Vietnam’s north. Despite Viva Land not releasing the value of the transaction, CapitaLand Development, the development arm of CapitaLand Group, announced the divestment of Capital Place at $550 million.

Located at the intersection of Lieu Giai, Kim Ma, and Nguyen Chi Thanh streets in Hanoi’s Ba Dinh district, Capital Place offers 100,000sq.m of luxurious and green office and retail spaces, with the largest column-free premises in Vietnam, as well as soundproof floors, acoustic ceilings, and 32 high-speed lifts, along with other high-end amenities.

Eddie Lim, CEO of Viva Land, said that the acquisition of Capital Place is another step for Viva Land to develop and build outstanding, green, and sustainable spaces for generations and communities in Vietnam.

Increasing presence

The last months of 2021 also witnessed a range of new mergers and acquisitions (M&A). In December, Mitsubishi Corporation (MC) snapped up 80.17 per cent of legal capital from MV2 Vietnam Real Estate JSC. MC’s subsidiaries will hold the major role and the management rights in the MV2.

According to the Vietnam Competition and Consumer Authority under the Ministry of Industry and Trade, last year the M&A in the real estate sector was active with a series of large deals when real estate businesses continued to expand the land fund and transfer the project.

In 2021, the authority received and processed 14 dossiers of notice of economic concentration in the real estate sector (including residential and non-residential real estate) from enterprises such as Vinhomes, Nam Long Investment JSC, Phat Dat Real Estate Development JSC, BCI JSC, and many more.

In November alone, a group of shareholders of BCI JSC transferred entire shares to Gia Tan Development Investment Co., Ltd., Hanoi Industrial Management Services Co., Ltd. and Industrial Property Management Co., Ltd.

The previous month, a group of Vina Partners Investment JSC’s shareholders also transferred shares to a buying group including Phuoc Loi Development Investment LLC, Hanoi Industrial Management Services LLC, and Industrial Real Estate Consultancy and Management LLC.

The Vietnam Competition and Consumer Authority is also proceeding with the dossiers for M&A approval from a range of companies, such as Vietnam-Singapore Industrial Park, AMATA Bien Hoa, and Sumitomo Corporation, to jointly develop and operate a new industrial zone located in the central province of Quang Tri.

Many other investors such as Novaland, Dat Xanh, Danh Khoi, An Gia, and Hung Thinh have announced their strategy to acquire new land plots to be ready for new development phases ahead.

More deals expected

More M&A transactions are imminent in the property market and real estate prices are likely to escalate this year, industry insiders said.

David Jackson, CEO of Colliers International, said that since the pandemic has caused the industry to suffer losses, many businesses would no longer be able to complete half-finished projects and be forced to sell out to others with deeper pockets.

“Those with strong finances are also likely to opt for M&A deals since little land is available to strike out on their own, and they would especially try to buy out unfinished projects and bring them quickly into the market,” he said.

In the next 12 months, Vietnamese companies would continue to play a crucial role in real estate M&A thanks to their better understanding of the market than foreign counterparts, Jackson added.

He predicted that most M&A deals would involve projects on the outskirts of large cities or in provinces that have recently emerged as new economic hubs, a trend that has already been witnessed.

Michael Kokalari, chief economist of VinaCapital, expected that the earnings of real estate development companies would grow by nearly 25 per cent in 2022. This is driven by a near-doubling of sales/pre-sales of new housing units following a drop of more than 50 per cent in 2021 because of lockdowns, as well as legal/regulatory issues that are now starting to be addressed and resolved.

In addition, the earnings of real estate groups that have recurring revenues, such as real estate brokers and shopping mall owners/operators, are also set to rise this year.

“Continued enthusiasm for investing in real estate – thanks in part to the low deposit rates banks pay savers – should ensure that property prices continue to increase in 2022, and we estimate that apartment prices in Hanoi and Ho Chi Minh City rose by about 10 per cent in 2021. We believe that the continued increase in real estate prices and pent-up demand to purchase homes to live in or for investment purposes will drive the anticipated jump in the pre-sales of new housing units in 2022,” Kokalari cited.

According to JLL’s assessment, in the context of a shortage of land funds even before the pandemic, the race to acquire land funds is forecast to continue and this will change the face of the housing market over the next five years.

“Land funds in big cities such as Hanoi and Ho Chi Minh City are increasingly scarce, while land prices are constantly increasing. Developers have quickly grasped the trend and moved to new potential destinations. Many real estate M&A deals will be conducted in 2022 and the focus will be on the coastal provinces, the central coastal region, and even the Central Highlands,” said a JLL report.

Tran Khanh Quang, CEO of Viet An Hoa, said that M&A is considered an effective method to help potential businesses reduce time and costs when entering the market or expanding their business.

“This race is good for the whole market and can help struggling projects revive. At the same time, it also helps to increase the supply in the real estate market, contributing to the recovery and stabilisation of this market,” Quang said.

Moreover, Quang added that in the current challenging context, it is a positive sign that many deals are nevertheless still in the negotiation and legal review stage.

Source: VIR



Vietnam targets 7% GDP growth this year: minister



HANOI — Vietnam is aiming for economic growth of 7% this year, the country’s planning and investment minister said on Monday, higher than an official target of 6.0%-6.5% set previously.

To achieve this, year-on-year economic growth in the third quarter needs to be 9.0% and in the fourth quarter 6.3%, minister Nguyen Chi Dung also said during a government meeting.

Dung said Vietnam’s budget was in surplus, giving scope for fiscal policy to be used to support businesses and residents.

“Credit institutions will need to further cut their lending interest rates to reduce input cost pressure for businesses and for the economy,” he said.

Vietnam, a regional manufacturing hub, started lifting its coronavirus curbs late last year, allowing factories to resume full operations.

The economy is recovering after growing only 2.58% last year, the slowest pace in decades.

The Southeast Asian country reported GDP growth of 7.72% in the second quarter, backed by strong export growth, but warned of upward inflation pressure for the rest of the year. 


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Vietnam spends $40bln importing computers, electronic components since early 2022

Computers and electronic components continue to be the lead group of imported goods, with a turnover of approximately $40 billion, according to the latest data from General Department of Customs.



From the beginning of the year to June 15, the country spent $39.62 billion importing computers, electronic products, and components, an increase of 29.3% from a year ago.

Computers, electronic products, and components remain the largest import item of Vietnam, accounting for 23.36% of the total import turnover of the economy.

The second-largest imported goods were machinery, equipment, tools, and spare parts with $20.43 billion. The largest import market of this product group was Asia.

Importing computers, electronic products, and components from South Korea was $10.53 billion, a sharp increase of 44% from an earlier year. China was after South Korea with $10.36 billion, up 29.2%. Computer import from Taiwan was recorded at $4.98 billion, up 35.5%; from Japan with $2.89 billion, up 39.8%.

From the beginning of the year to the end of June 15, the total import turnover reached $169.58 billion, an increase of 16.3% (equivalent to an increase of $23 0.8 billion) from last year.

In addition to computers, and electronic products, commodity groups with high turnover such as petroleum increased by $2.53 billion, an increase of 128.4%. Coal of all kinds increased by $2.19 billion, equivalent to 135.7% growth.


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Yeah1 to buy TV firm amid restructuring

Online entertainment company Yeah1 plans to buy a 51 percent stake in TV and radio company STV amid a major restructuring endeavor.



The deal is set to be completed this quarter. STV, established in 2008, owns lifestyle TV channel StyleTV, stock and finance channel InfoTV and radio channel Joy FM.

The deal was announced after Yeah1 founder and chairman Nguyen Anh Nhuong Tong sold his entire 12.89 percent stake on June 1 after 15 years of leading the company from an online news website to the first media company to be listed on the Ho Chi Minh Stock Exchange.

Several other major shareholders have also been pulling out since February, including DFJ VinaCapital Venture Investment.

Yeah1 has postponed its annual general meeting twice this year saying more time was needed to prepare important documents.

It reported post-tax profits of nearly VND28 billion last year after two years of losses.

Its contract with YouTube was terminated in March 2020 due to a violation of policies, and what began as an operational error has “turned into a real crisis for the company,” Tong once said.

Yeah1 targets revenues of VND588 billion this year, down 45 percent from 2021 and the lowest since 2017.

It plans to issue 78.6 million new shares to increase its capital.

Source: VnExpress


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