M&A in real estate blossoming

Vietnam’s real estate market is witnessing surge in merger and acquitisions (M&As), typically two deals made by Vincom Joint Stock Co (VIC).
Firstly, Vincom approved the decision to transfer 10% of capital (equaling to 30 billion dong) in Viettronics reak estate Co Ltd to Sinh Thai Investment and Development Joint Stock Co. This is the project of trade centre, office and housing with total area of 13,000 square meters in Nguyen Chi Thanh St, Dong Da Dist, Hanoi and total estimated cost of more than 3.2 trillion dong. After finishing transfer procedures, Vincom’s ownership ratio in the project was cut from 84% to 74%.
Secondly, Vincom late June completed the transfer of 56% stake in the complex of trade centre, office and housing at 233B-235 Nguyen Trai St, Thanh Xuan Dist, Hanoi to Sun Group without elaboration on value. Earlier, Vincom had spent over 128 billion dong buying additionally-issued shares of the Sun Group to own the majority stock in the project.
In addition, Archi Group recently bought back 67% stake of Ho Song Da Tourism Co (Sudito) and took over Kim Boi Tourism Investment Joint Stock Co; FPT sold its stock in FPT Building project at 89 Lang Ha St, Dong Da Dist, Hanoi.
In the southern region, M&As in the real estate field was also so busy. Hoa Sen Group (HSG) decided to sell some projects namely Hoa Sen Phuoc Long B and Hoa Se Riverside in Dist 9 (HCM City); transfer land using right at No 123 Tran Nao St, Binh An Ward, Dist 2; or sell 45% stake in Hoa Sen-Gemadept international port project.
Previously, in Q2 of 2011, CapitaValue Homes under CapitaLand invested 121.2 billion dong buying back 65% stake of Quoc Cuong Saigon Co. CapitaLand took the right of using a land lot of 9,000 square meters in Binh Chanh Dist (HCM City) which Quoc Cuong Saigon owned with a view to build 800 apartments. CapitaValue Homes also acquired other three projects in Vietnam.
Edward Chi, General Director of Coldwell Banker Vietnam said that publicized M&A deals only showed the surface of real estate market, factually there were a lot of underground deals. Partners usually select the projects of weakening enterprises because they think that value of land still would bring in good profits in the future.
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