The bidding price for a land plot in the Thu Thiem New Urban Area is currently VND 2.45 bn per sq. meter or over 40 tael of gold per sq. meter. 

Illustrative photo.

 

This has raised the interest of both domestic investors as well as several foreign investors. Many investors are now clambering to get a share of the Thu Thiem New Urban Area, as now it is being seen as a potential gold mine.

 

Land assigned to business giants

 

Recently, Ho Chi Minh City allocated vast tracts of land to a number of businesses to implement several lucrative projects. The enterprise that was allocated the most land was the Dai Quang Minh Company, which is currently developing an urban area in the beautiful and strategic location of Thu Thiem. The Dai Quang Minh Company was allocated up to 60 lots, and in exchange Dai Quang Minh will build four roads in Thu Thiem New Urban Area as well as the Thu Thiem 2 bridge.

 

Other enterprises such as the CII Company were assigned 9 lots to build infrastructure in the Northern residential area of Thu Thiem; while the South Korean investor, GS Engineering Construction Corp (GS), was assigned 4 lots to invest in the Tan Son Nhat-Binh Loi route. The investor for building the Thu Thiem 4 bridge is expected to be assigned 11 lots.

 

Many land plots in the Thu Thiem New Urban Area have also been allocated to a group of investors. A favorable location right at the entrance of Thu Thiem Tunnel, has been assigned to Emperor City Co., Ltd., a joint venture between Tran Thai-Tien Phuoc and GAW from Hong Kong. The Lotte Group has been assigned a land area of 7.45 hectares, currently under the trade name Thu Thiem Eco Smart City. A leading large real estate corporation in Vietnam has also been assigned 17 hectares for a Center of Finance and Banking, Trade and Services, as well as for a housing project. An area of 8 hectares has also been assigned for a multi-functional residential and commercial area.

 

One of the BT projects that has received the most attention from the public in recent times in the Thu Thiem New Urban Area is that of the Dai Quang Minh Company, for the construction of a 12 km internal road at a total investment of around VND 12,000 bn. This enterprise has been allocated the most land through BT projects. Specifically, under BT contract, the People's Committee of Ho Chi Minh City has agreed to assign Dai Quang Minh Company around 79 hectares of land in the urban area to develop many real estate projects.

 

High price of land

 

Currently, a project comprising of 1,100 apartments on Nguyen Co Thach Street is open for sale since 2020, covering VND 100 mn per sq. meter, with recorded transactions of VND 130 mn per sq. meter. Another luxury apartment project located on Luong Dinh Cua Street is selling at transaction price higher than VND 150 to VND 220 mn per sq. meter. Also along the Saigon River, apartments and commercial centers are for sale at VND 160 to VND 180 mn per sq. meter. Most of the prices of these super luxury apartments have increased by 30% to 50% since they were constructed.

 

Meanwhile, land prices at riverside locations around the Thu Thiem peninsula range from VND 350 to VND 400 mn per sq. meter. According to a survey by Rever, the price of high-rise buildings in the Thu Thiem New Urban Area have continuously skyrocketed year by year between the period 2015 until 2021. The lowest price increase was of 30% for projects offered for sale within the last two to three years, while projects that were offered for sale six years ago now have an increase of over 100%.

 

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), said that the auction results of Thu Thiem land plots brought a great source of revenue for the budget of Ho Chi Minh City, especially at a time of the ongoing pandemic which was wrought with difficulties. This auction is also the basis for Ho Chi Minh City to develop large urban areas by means of public auctions and biddings. However, the winning price of the auction is too high, and it will affect the whole area, pulling the real estate price level in the surrounding areas to a new high. Investors will have to set very high expectations for market price, which will definitely affect the supply and demand for housing for many years to come.

 

According to the Management Board of Thu Thiem New Urban Area, there are currently 51 plots of land in the new urban area covering over 793,000 sq. meters. These plots of land are all waiting for more investors, and many of these lots are already up for auction. The Ho Chi Minh City Land Fund Development Center said that it is completing the auction procedures for 6 land lots in functional area 1 and 3,790 apartments on 5 land lots from R1 to R5 in an area of 38.4 hectares in An Khanh Ward. It is expected that land lots and apartments will be put up for auction in early 2022. The plots of land in functional area No. 1 are planned for commercial, service, and housing needs. The People's Committee of Ho Chi Minh City has also approved the 1:500 ratio plan for these 6 land lots and advocated for each lot to be auctioned to select investors. There are 6 lots in area 2C, 2 lots are planned for the convention and exhibition center and the land lot bears the symbol 7-1. According to the plan, the land lot 7-1 will be a resort hotel, which has now completed compensation for site clearance and has been approved by the People's Committee of Ho Chi Minh City to auction off for land use rights.

 

Star Viet Real Estate Investment Co., Ltd won bid for 3-12 plots after 70 auctions, valued at VND 24,500 bn, 8.3 times higher than starting price of VND 2,942 bn. Viet Star is a member of the Tan Hoang Minh Group, with head office in O Cho Dua Ward, Dong Da district, Hanoi. Tan Hoang Minh Group is the developer of several high-end projects in Hanoi and Ho Chi Minh City. Mr. Nguyen Manh Hung is the company representative.

 

Dream Republic Joint Stock Company won bid for 3-5 plots for VND 3,820 bn, 6.6 times higher than starting price, beating 130 bids from 21 auctioneers. Dream Republic was established in October 2017, with headquarters in VVA Tower, No. 277-279 Ly Tu Trong, Ben Thanh Ward, District 1, Ho Chi Minh City. Ms. Tran Thi Mong Linh is the company representative.

 

Sheen Mega JSC won bid for 3-8 plots with area of 8,500 sq. meters at VND 4,000 bn, 4 times higher than starting price. The auction had 10 businesses registered but only 6 participated with 67 bids. Sheen Mega was established in November 2019, headquartered at 32 Le Loi, Ben Nghe Ward, District 1, Ho Chi Minh City. Ms. Nguyen Thi Huyen is General Director and legal representative of the company.

 

Binh Minh Trading Co., Ltd. won bid for 3-9 plots covering an area of about 5,000 sq. meters for VND 5,026 bn, 6.9 times higher than starting price of VND 728.6 bn. Binh Minh Company is located in Cong Vi Ward, Ba Dinh District, Hanoi.

Do Tra Giang