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By JLL, Real Capital Analytics
Vietnam, 10 July 2017 – Vietnam has become an attractive destination for many foreign investors largely due to the country's friendly policies encouraging FDI, its political stability and strong economy. The level of FDI has continued to grow year-on-year due to these strong fundamentals with newly registered FDI to USD 19.2 billion in first half of the year, representing a rise of 54.8% y-o-y. Vietnam remains one of the most favorable destinations for foreign investment in South East Asia.
In 2017, a vibrant real estate market will elevate the number of merger and acquisition to a new record. The Vietnamese real estate market continues showing irresistible appeal to foreign investors, mostly through merger and acquisition. Joint ventures have become popular among foreign developers who have strong financial capacity and track record joining forces with local developers who own land and have strong connection with the local community. JLL observe there are hundreds of million dollars waiting to be poured into the market in most segments including residential, office, retail, hospitality and industrial. Investors are from many different countries such as Japan, Korea, Singapore, with an increasing number of groups from mainland China.
When looking at the market as a whole we expect continued growth through most asset types. Hospitality has been interesting over the past year with new funds with foreign capital now specifically targeting this sector. We expect that this trend will continue in hospitality, and in other growing sectors such as Industrial and alternatives like education. The affordable housing market is another key growing sector, now drawing specialist capital sources who identify value in these underlying fundamentals including growing middle class.
Due to the strong focus on Vietnam from regional investors, we expect M&A activities to reach record levels in 2017 and 2018.
List of some M&A transactions in Vietnam 1H17:
Source: Real Capital Analytics
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