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JLL: M&A to rocket in 2016

Released at: 01:26, 16/04/2016

JLL: M&A to rocket in 2016

The market continues to see strong interest from foreign investors from South Korea, Japan and Singapore.

by Nguyen Quynh

Merger and acquisition (M&A) activity in real estate has continued where it left off in 2015 with deal volumes increasing in the first three months of 2016 and many successful transactions made, said Mr. Stephen Wyatt, General Director of JLL Vietnam.

The market continues to see strong interest from foreign investors from South Korea, Japan and Singapore.

The most notable transaction in the first quarter was the deal between Keppel Land and the owners of Empire City in District 2, Ho Chi Minh City, where Keppel Land acquired 40 per cent in a deal worth $93.9 million.

There were many transactions in investment assets (core producing properties), such as A&B Tower (Ho Chi Minh City), The Nam Hai Resort (Quang Nam province), TNR Tower (Hanoi), and Six Senses Con Dao Resort (Ba Ria Vung Tau province).

A&B Tower in Ho Chi Minh City has attracted much attention from the market due to the good quality of the office building and the fact that asset trades have been rare in District 1.

There are also many M&A deals in development sites between foreign and local developers.

“We expect M&A activity to improve through 2016 with more transactions over the remainder of the year thanks to a combination of an improved property market, positive changes in legislation, and soft conditions in other countries in the region,” said Mr. Wyatt.

2015 was seen as the year of M&A. Mr. Wyatt also told VET that foreign investors are prepared to look at a number of ways to invest in Vietnam. “Their main criteria for looking at opportunities will depend on location, deal size, ownership structure, the remaining term of the lease, the quality and track record of the joint venture partner, and any outstanding legal issues, and above all the acquisition will have to be viable, as it is unlikely any foreign investor will pay above market value for an asset, unless it is a ‘trophy asset’ or has the potential to add significant value by proactive asset management or has a potential upside from improvements in infrastructure,” he said.

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