The Vietnamese real estate market is likely to witness more mergers and acquisitions in the next 12 months if it continues facing capital shortage.

The Vietnamese real estate market will see more M&A in the next 12 months

This is according to Neil MacGregor, Savills Vietnam\'s Deputy Managing Director.

Currently, property investors have more choices to cover their capital shortage, instead of just depending on banks, including selling the projects to other investors or seeking partners for capital contribution, he said.

Neil MacGregor added that many investors who are hold large areas of land are choosing to part to raise funds for other projects.

According to Savills Vietnam, M&A increased in the world real estate market between 2009 and 2010.

In Asia Pacific, the total M&A contract value in the property market increased to USD22.7 billion in 2010, from USD12 billion in 2009.

The Vietnamese real estate market has been on a downward trend due to lack of capital, therefore, which will lead to more M&A in the next 12 months,” Neil MacGregor highlighted.

Racing to sell

Over the past two years, the Ho Chi Minh City property market has seen a series of large real estate transactions, particularly recent months.

Most recently, JSM Indochina Ltd. transferred a project called Peninsula to Sao Sang Saigon Company, an affiliate of Nam A Bank, at a price of USD11 million. The project covers 7,400 square metres in District 2.

Khang An Real Estate JSC agreed to sell 80% of its stake in a residential project in Binh Tan District to Singapore’s Dacin Holdings.

The same is the case for many other large projects in the city.

Savills Vietnam said, in 2010 only, it gave consulting services for property transactions worth over USD100 million in total.