Property market experiences significant transactions
In the bustling city of Hanoi, Vietnam, the VietinBank Tower project, a high-end commercial and residential development, is up for sale with an asking price of approximately $400 million. The potential buyers for this prime real estate asset are likely to include institutional investors, real estate developers, and financial institutions interested in Grade A commercial properties, given the strong demand for high-end serviced apartments and office spaces in Hanoi's growing property market in 2025.
The market shows robust foreign investment interest and strong absorption rates in new inventory, especially in Grade A projects, signaling a favorable environment for buyers of such prime real estate assets. However, challenges remain for the completion of the VietinBank Tower project, including fluctuating market demand, potential financial or ownership structure adjustments, and complexities related to financing, regulatory approvals, and market absorption rates that could delay completion.
Can, a real estate M&A expert, emphasised that a well-capitalised investor with a long-term outlook would be required for the project. Despite these challenges, Can remains optimistic about the outlook for the rest of 2025, as legal bottlenecks are gradually being addressed, capital availability is improving, and overall market sentiment is strengthening.
Meanwhile, in Ho Chi Minh City, the hospitality sector is still in recovery mode and not yet vibrant enough to drive big-ticket deals. However, urban residential real estate is expected to continue leading M&A activity over the next six months. One such development is The Fullton, a project by CapitaLand, which plans to develop approximately 700 low-rise units. The expected total investment for The Fullton is around $800 million.
Another significant development is the Ho Chi Minh City merger with Binh Duong and Ba Ria-Vung Tau provinces, marking the creation of Vietnam's first multi-centred 'megacity' model. This merger paves the way for a new phase in industrial real estate development.
The real estate M&A market has not reached a true breakthrough due to legal uncertainty and pricing issues. Many sellers quote inflated valuations during negotiations, which is a significant hurdle. Buyers, on the other hand, prefer legal clarity, relatively clean land, or projects that can be cleared in an acceptable timeframe.
In the midst of these developments, Gateway Thu Thiem JSC acquired a 42% stake in Nam Rach Chiec Company, the developer of Palm City in Ho Chi Minh City, from Singaporean real estate group Keppel. Palm City is a 30-hectare mixed-use urban development located along the parallel road at the entrance to Ho Chi Minh City-Dau Giay Expressway.
Despite the challenges, there is cautious hope that other asset classes may begin to catch up in 2025. Industrial real estate has slowed due to countervailing US tariffs, while office and hotel assets are thriving only in large cities like Hanoi and Ho Chi Minh City. The project, located in the Nam Thang Long urban area, occupies nearly three hectares and comprises two high-rise towers of 48 and 68 storeys. One tower was initially intended to house VietinBank's headquarters, while the other was planned as a 5-star hotel.
In a significant move, Vinhomes transferred a 25-hectare subdivision to Singapore-based CapitaLand in the second quarter. Vinaconex is the developer of Cat Ba Amatina in Haiphong, a 170-hectare coastal urban tourism complex. The real estate market continues to evolve, and as challenges are addressed, opportunities for investment and development abound.
Investors and financial institutions looking to enter the real-estate market in Vietnam might find appealing opportunities in the VietinBank Tower project or the Palm City development in Ho Chi Minh City, given the robust foreign investment interest and strong demand for high-end serviced apartments and office spaces. However, potential buyers should be aware of the complexities related to financing, regulatory approvals, and market absorption rates that could delay completion.
