The Next Wave of M&As: Vietnam’s Rising Tide

Vietnam’s Real Estate Market: FDI Inflows and M&A Activities

Vietnam’s real estate sector continues to attract significant foreign direct investment (FDI), according to the General Statistics Office under the Ministry of Finance. In the first two months of the year, the country recorded nearly $6.9 billion in FDI, a remarkable 35.5% year-on-year increase. Out of this, the real estate sector accounted for 16.9%, or $371.5 million, of the newly registered FDI capital, securing its position as the second-highest sector for foreign investment.

This trend is expected to continue, with foreign investors boosting M&A activities in the real estate market through project acquisitions. As a result, domestic investors are quickly joining the race, leading to predictions of numerous large-scale transfer deals in various regions and market segments by 2025.

Nguyen Van Dinh, Vice Chairman of the Vietnam National Real Estate Association (VNREA), believes that recently effective laws related to investment, business activities, and the real estate market will facilitate smoother M&A transactions. He adds that the upcoming period will see a market dominated by truly capable investors, as weak investors are eliminated through a natural selection process.

This assessment is shared by Nguyen Cong Ai, Deputy General Director of KPMG Vietnam, who notes that the Vietnamese M&A market is expected to flourish in 2025, particularly in key sectors such as real estate, manufacturing, information technology, and consumer goods. This outcome is supported by government policies and a shift in investment trends towards technology sectors like AI and tech-driven services.

Significant M&A capital inflows are anticipated in real estate, healthcare, and education sectors in 2025 – Illustrative Image

Trang Le, CEO of JLL Vietnam, echoes this sentiment, predicting a major M&A wave as foreign partners observe projects and businesses in Vietnam. She attributes the appeal of Vietnam’s office and industrial real estate market to the impact of the global economy, which could boost the development of the commercial real estate segment.

Already, the market has witnessed several high-profile M&A deals, such as the partnership between Kim Oanh Group and four Japanese partners for the One World project in Binh Duong Province. Becamex IDC’s transfer of a housing project worth $553 million to Sycamore Limited, a subsidiary of Singapore’s CapitaLand Group, further underscores the attractiveness of Vietnam’s real estate sector.

Healthcare and Education Sectors Also Witness M&A Activity

In addition to real estate, the healthcare and education sectors are expected to experience robust M&A activity. PwC’s “Global M&A Trends” report forecasts a vibrant healthcare M&A market in Vietnam in 2025 due to increasing demand for high-quality healthcare services and a growing middle class. Private hospitals and specialized healthcare facilities, particularly in ophthalmology and oncology, will be focal points for investors.

Meanwhile, the education sector’s M&A market is also gaining traction, thanks to policies encouraging foreign investment in educational institutions. PwC’s report notes that M&A activities in 2025 are expected to be bustling, driven by policies encouraging investment and the rising demand for private education. Strategic partners and investors in higher education and vocational training will play a crucial role in enhancing education quality and infrastructure, creating a favorable environment for investors.

Ong Tiong Hooi, Transaction Services Leader at PwC Vietnam, emphasizes the importance of understanding sector-specific trends and creating core values to succeed in Vietnam’s dynamic M&A market. He recommends that negotiators remain wise and keep a close eye on valuations, interest rates, and geopolitical factors to seize new opportunities.

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