In the first seven months of this year, foreign investors from Singapore, South Korea, Taiwan, Japan, and Malaysia directed approximately $1.4 billion into merger and acquisition (M&A) deals in Vietnam’s burgeoning real estate sector. According to Dao Thien Huong, Deputy General Director of EY Consulting Vietnam JSC, the total M&A market value in Vietnam reached nearly $3.2 billion within this period, marking a 62% reduction from the same timeframe last year.

One noteworthy transaction was ESR Group Limited’s $450 million expenditure to increase its stake in BW Industrial Development Joint Stock Company (BW Industrial) in January 2023. This transaction is currently recognized as the largest deal within the Vietnamese real estate market and is particularly significant within the industrial property segment. Meanwhile, in the residential and urban area segment, Gamuda’s $305 million acquisition of a 3.68-hectare project in Ho Chi Minh City’s Thu Duc city stands as the largest deal in this market segment.

Despite the active involvement of foreign investors, who constitute 92% of the buyers in Vietnamese real estate M&A deals, the process is far from seamless. Challenges persist, particularly concerning the legal framework for foreign ownership of real estate in Vietnam. Complex legal procedures have been cited as a major factor slowing down M&A deals and increasing their associated costs. Nevertheless, optimism remains for the future, with expectations for a more vibrant M&A scene in the real estate sector from 2024 onwards.

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Tim Burrill
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