The report noted that in September, VinaLand, the real estate arm of VinaCapital, divested its entire stake in the Vina Square Project, a 3-ha development in Ho Chi Minh City’s District 5, to the Tri Duc Real Estate Company for net cash proceeds of approximately $41.2 million, with repayment of shareholder loans included, resulting in an internal rate of return (IRR) of 3.3 per cent.
Though residential and commercial transactions dominated M&A activities in the quarter, JLL also recorded one industrial transaction, in which Ascendas - Singbridge transferred a 0.3-ha land plot at the Ascendas - Protrade Singapore Tech Park (APSTP) to Koan Hao Technology, a Taiwanese manufacturer of self-adhesive labels.
APSTP is a 500-ha new-generation industrial park in southern Binh Duong province that provides industrial space from prepared land parcels, ready-built factories, and other tailor-made solutions.
The JLL report also anticipated that subsequent quarters would continue to see strong demand from a wide range of investors seeking to make the cut in Vietnam’s real estate market, with a particular focus from groups in Japan, South Korea, Singapore, Hong Kong, and mainland China.
With fierce competition and limited supply of good quality stock, it will be keeping an eye on further real estate M&A transactions as investors seek ways to deploy capital quickly and efficiently.
According to JLL, Vietnam has become an attractive destination for many foreign investors, largely due to the country’s friendly policies encouraging foreign direct investment (FDI), its political stability, and its strong economy.
The level of FDI has continued to grow year-on-year due to Vietnam’s strong fundamentals, with newly-registered FDI at $19.2 billion in first half of the year, representing a rise of 54.8 per cent. Vietnam remains one of the most favorable destinations for foreign investment in Southeast Asia.
 Due to the strong focus on Vietnam from regional investors, JLL expects M&A activities to reach record levels in 2017 and 2018.
The country’s real estate market continues to have irresistible appeal to foreign investors, mostly through M&As. Joint ventures have also become popular, with foreign developers possessing strong financial capacity and a solid track record joining forces with local developers that own land and have strong connections with the local community.