Real estate sector witnessing mergers and acquisition activities

Recently, many real estate projects have been bought back by both foreign and local investors such as Dat Xanh Group that succeeded in acquiring four projects from local partners, including Majestic project (Bien Hoa, Dong Nai), Bella (HCM City), Gold Hill (Trang Bom, Dong Nai) and Marina (Binh Duong). The value of each deal was estimated at from 100-200 billion dong.

Representative of Dat Xanh Group said that in recent two months, mergers and acquisitions (M&A) activities of projects have occurred more frequently as the buyers have more choices in terms of both projects and areas. Moreover, the prices given by the sellers are relatively suitable to the buyers, so the negotiation process takes place more easily.

Previously, there were also many enterprises catching opportunities to earn valuable assets such as Thien Minh Group acquired the chain of five resort areas and hotels with the trade name of Victoria (from EEM Victoria Ltd Co, Hong Kong) in Vietnam.

Following Thien Minh, many companies have also started the race to acquire projects, of which, Sao Sang Saigon Joint Stock Co, a member of Nam A (South Asia) Commercial Joint Stock Bank (NamABank), paid $11 million to acquire Peninsula project (Thao Dien ward, district 2, HCM City) from its partner namely JSM Indochina Ltd.

The 36-hole golf course project in Cu Chi (covering an area of 200 hectares) of GS Saigon Development one-member LTd Co, Korea (GS Engineering & Construction Corp, abbreviated as GS E & C) was acquired by CT Group and put a new name: C.T Sphinx Golf Club & Residences.

According to the local newspaper Doanh Nhan Saigon, C.T Group is also completing procedures to acquire GS Cu Chi Development one-member Ltd Co (a golf course development project company under GS E & C).

Along with this acquisition, recently, C.T Group has also straightforwardly received land use right of area No 259 Dien Bien Phu (District 3) from Saigon Petroleum Service Co (SPSC).

Accordingly, the new legal entity to develop this project is C.T Green Co that will be contributed capital by C.T Land (a subsidiary of C.T Group) and SPSC. To pay land use fee, capital contribution and capital for project development (over 400 billion dong), SPSC will borrow from C.T Green and C.T Land at an interest rate of 0%.

At the same time, SPSC will repay the loan by the transfer of land use rights for C.T Green.

Overall, the M&A deals in real estate sector were not only through the acquisitions form of the entire project but also by contributing capital to the project or purchasing stake of the project owners.

For example, Hoang Anh Gia Lai Group Joint Stock Co (HAGL-HAG) has contributed 60% stake in HAGL Incomex residential project (District 7) or bought 100% of the Thanh Binh project (District 7) to invest and develop the apartment type.

At the same time, HAGL also contributed 45% stake, along with Tan Thuan Construction Investment Co., Ltd. for a building project in district 7, HCM City. - Source: Vietbiz24