Merger and acquisition (M&A) deals in the real estate industry were forecast to continue thriving this year, according to industry insiders.
Chairman of the Thu Duc Housing Development Co Le Chi Hieu said buyers with cash in hand would have major opportunities this year as there would be many real estate firms eager to divest or transfer their projects this year. Echoing Hieu, chairman of the Dat Xanh Real Estate Construction and Service Co Luong Tri Thin also forecast that this year would be a ‘historic time of M&A deals in real estate’ for investors who have long-term strategies. Thin said that last year, many real estate firms faced financial difficulties and were forced to transfer their projects this year, creating a major opportunity for buyers to select good projects at low prices. Thin predicted that potential buyers could come from Asian countries including Singapore, Japan and Malaysia, as they are eager to further get involved in the Viet Nam market. Chairman of the HCM City Real Estate Association Le Hoang Chau said the country’s real estate market has been on the potential investment list of many foreign corporations since last year.“2013 could see the beginnings of capital disbursement,” he said. Industry insiders said buyers had many choices this year, adding that besides Vietnamese developers’ projects, there are also available supply sources from investment funds which want to profit from 3-5 year invested projects. They said that M&A deals in apartment building projects would be mainly around those priced less than VND17 million (US$813) per square metre and nearly completed. However, it would be harder for sellers of large-sized urban projects whose infrastructure and transport links haven’t yet been completed. According to Q4 financial reports of listed real estate firms, the transfer of real estate projects contributed significantly to their profits in the last quarter last year. The Dat Xanh Real Estate Construction and Service Co, for example, last year invested in eight real estate projects up to December 31, as its profits surged to more than 30 per cent thanks to the deals. It was the same with Nam Bay Bay Investment Co as the company’s turnover from land-use rights transfers increased from VND22 billion ($1 million) in 2011 to VND33 billion ($1.6 million) last year, helping the company double its turnover to VND184.2 billion ($8.8 million).