REAL ESTATE M&A SURGE WITH DOMINATION OF FOREIGN GIANTS

The total value of M&A transactions in Việt Nam reached approximately US$4.8 billion in the first eight months of 2025, reflecting a 21 per cent increase from last year.

Apartment projects in Hà Đông Ward. —VNA/VNS Photo

HÀ NỘI — The Vietnamese real estate market is experiencing an unprecedented surge in mergers and acquisitions (M&A), with both domestic and foreign companies actively driving growth in this vibrant sector.

According to a recent report by Grant Thornton Vietnam, the total value of M&A transactions in the country reached approximately US$4.8 billion in the first eight months of 2025, representing a 21 per cent increase from the same period last year.

The average deal size has also risen to $42 million, up 15 per cent from 2022 to 2023, signalling a robust inflow of capital into large-scale transactions.

In August alone, the market recorded 18 M&A deals valued at around $2.23 billion. Although this was lower in volume than July, the value increased significantly due to numerous restructurings and strategic partnerships.

A standout transaction was VinFast Auto Ltd.’s establishment of Novatech Research and Development JSC, in which it sold 62 per cent of the shares to Vingroup Chairman Phạm Nhật Vượng.

This $1.52 billion deal not only marks the largest transaction of the year but also underscores Vingroup's extensive restructuring strategy.

The month also saw significant acquisitions by foreign investors.

Appirits Inc., from Japan, spent approximately $241 million to acquire technology firm Bunbu. In comparison, HD Korea Shipbuilding & Offshore Engineering acquired Doosan Vina for $210 million, transforming Quảng Ngãi Province into a regional manufacturing hub for cranes.

Additionally, SSG Group invested VNĐ507 billion to acquire nearly 12 per cent of Seaprodex, targeting the company's prime land assets.

While domestic firms are actively engaging in the M&A space, they are often outpaced by foreign investors in high-value deals.

According to Savills Vietnam, foreign giants are increasingly securing the 'blockbuster' M&A transactions due to their robust financial capabilities and long-term strategies.

For instance, SkyWorld from Malaysia recently acquired Thuan Thanh JSC for VNĐ350 billion and is set to purchase a project in HCM City with complete legal documentation.

Other notable foreign investors include Capitaland, which invested $553 million in a project from Becamex IDC in Bình Dương (now HCM City), and Nishi Nippon Railroad, which acquired 25 per cent of the Paragon Đại Phước project from Nam Long.

Promising prospects

Experts suggest that while domestic firms dominate in transaction volume, larger deals and significant projects are predominantly handled by foreign investors.

Chairman of VCCI Phạm Tấn Công said the increasing involvement of international groups helps Việt Nam access technology, management practices and capital, creating leverage to enhance competitiveness.

However, the M&A landscape is not without challenges. High land costs, fluctuating land use fees and prolonged legal procedures pose risks to potential investors.

CEO of Phu Dong Group Ngô Quang Phúc emphasised that land use fees can sometimes rival land acquisition costs, complicating profit calculations.

According to DKRA Group, sellers currently hold the upper hand due to the scarcity of prime land and fully legalised projects, pushing sale prices higher and limiting participation from small and medium-sized enterprises.

Savills Vietnam predicts continued positive growth in the M&A market through the end of the year, particularly in renewable energy, logistics and fintech sectors.

Legal reforms, economic diplomacy and a focus on sustainable value will drive this growth, with collaborative development models and phased M&A becoming increasingly popular.

The ongoing restructuring of provincial administrative units is expected to open new avenues for M&A investments, particularly in strategically located areas.

With strong participation from both domestic and foreign enterprises, along with a series of blockbuster transactions, Việt Nam’s real estate M&A market is firmly establishing itself as a regional hotspot.

Despite the challenges, the long-term outlook remains optimistic, promising a vibrant landscape in the last few months of 2025 and beyond. — BIZHUB/VNS

Source: VNS