Economic Sector

Last updated: Monday, April 22, 2019


Foreign Investors Keen on M&As

Posted: Thursday, August 03, 2017

With its positive macroeconomic development and political stability, Vietnam is becoming an attractive destination for foreign investors. And, M&As are given priority because this is the quickest method for foreign investors to enter the Vietnamese market.

Improving the environment for better competition
According to a research by Jones Lang LaSalle Group (LJJ), macroeconomic indicators, curbed inflation and impressive GDP growth are important factors for investors to consider entering the Vietnamese market. These have helped Vietnam draw a significant value of foreign direct investment (FDI).

The JLL research showed that FDI flows were on the upward trend in the first half of 2017. Vietnam attracted about US$19.2 billion of FDI in the six months, up 54.8 per cent year on year. As such, the country remained one of potential investment destinations in Southeast Asia.

JLL anticipated that the property market will continue to be active and attract foreign investors in 2017, driven by a host of mergers and acquisitions (M&As). In particular, the hotel segment is drawing the greatest interest of foreign investors. This is completely understandable as the tourism industry is thriving on loosened regulations on visa stay and good tourism infrastructure investment.

“We expect this trend will continue in the coming time. Besides, other markets such as industrial zones and education are constantly growing. The affordable housing market is seen as a source of investment capital, largely due to the rise of the middle class,” JJL said.

JJL visited that hundreds of millions of US dollars is waiting to flow into the Vietnamese property market in most segments like housing, office, retail, hotel and industrial spaces. Investors are from Japan, South Korea, Singapore and other countries.

Sharpened competitiveness
The cooperation between foreign investors and domestic investors is bringing a great competitive advantage in the market. According to JLL, domestic investors have business locations, have close relations with local authorities, understand laws and policies while foreign investors are financially able and experienced. The cooperation will enable both sides to achieve their objectives.

Mr Luong Tri Thin, General Director of Dat Xanh Real Estate Service & Construction Corporation, said, “Domestic companies’ choosing to establish strategic partnerships with foreign investors not only affirms their brand and prestige on the market but also helps enhance their competitiveness against other domestic companies and investors to achieve their planned goals.”

Cooperation fields between domestic and foreign investors are also gradually expanded and diversified rather than focus on real estate projects or commercial services as before. They are now keen on cooperation in other areas such as design consulting, supervision consulting, construction, materials supply, and operation management. This helps the market to have better suited products to consumer tastes. One of important criteria for cooperation is quality assurance, timely delivery, intelligent design, sustainable development and environmental friendliness.

Remarkably, Hung Phu Rei Corp transferred 40 per cent of stake in Riviera Cove Garden Villas project (Ho Chi Minh City) to Keppel Land Ltd; Vina Capital transferred 50 per cent of stake in The Sofitel Legend Metropole Hotel (Hanoi) to Undisclosed; Hung Thinh Corp acquired Moonlight Park View from Binh Chanh Construction; China Forture Land Dev took over Dai Phuoc Lutus (Dong Nai) from Vinaland JV Vietnam Opportunity Fund; Becamex handed over Bau Bang Urban Area and Industrial Park (Binh Duong) to Paiho Group.

Localities that have attracted FDI funds have also seen M&A deals. This promises that Vietnam is still a desirable destination for investors and M&A activity is thus expected to set new records in 2017 and 2018.

Si Son

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