Office accomodation
Written by Administrator   
Saturday, 11 March 2006

Office Accommodation in Vietnam

Unit Vietnam's economic liberalization (also referred to as "Doi Moi / Open Door" policy) that began with the 6th Party Congress of 1985, there was no foreign direct investment (FDI) in real estate, and so the country had no “International Standard� office properties until the latter half of the 1990’s. The “First Wave� of FDI brought with it a number of speculative investors, who pinned their hopes on Vietnam’s rapid integration into the world economy. These hopes didn’t materialize and the wider regional ‘Asian Economic Crisis’ put an end to any existing investors’ hopes of making a ‘quick-buck’. It also put a halt to all of the projects that were still on the drawing board (even if already licenced) and many that were already underway. Ten years later, the skyline of HCMC still shows several concrete skeletons (such as the Holiday Inn), though most of these are now either being completed (such as PetroVietnam Tower) or have recently been completed (such as the Hyatt). Many of the projects licenced in the mid to late 1990’s never made it the construction stage and are now ‘long-delayed’ and have been leased out to sub-investors, typically for 10 terms as coffee shop / restaurants, or have / are being re-licenced to new foreign investors, such as the USD$525 million ‘Black Hole of Saigon’; Saigon ‘Space-Ship’; or Asiana Plaza. A couple of the better sites have been acquired by new investors and are now under construction, such as Avalon and Times Square.

As a direct consequent of the total absence of FDI in real estate for about 10 years from @1995, Vietnam’s cities are now facing a chronic shortage of all types of space, including office accommodation. However, with a few (relatively) very large projects now underway the future looks better for tenants,,.. BUT these buildings will take 2-3 years to construct, and so space shortages and inevitably rental increases look set to continue in the short term. Thus, office rentals have roughly doubled over the past 5 years and are now roughly on par with Singapore.

In Vietnam there are a wide variety of office standards, from “Institutional Standard� Grade A buildings to potential ‘death-traps’ with, for example, no adequate fire escapes, and so which in many countries would be closed and immediately redeveloped. It seems inappropriate to us to classify this group of buildings as Grade C since they cannot be regarded as being “International Standard� and so we catagories office properties from Grades A-E with only genuinely “institutional standard� properties being classified as Grade A properties.

Classifying office properties by grades must, by definition, be a subjective exercise. Some investors would argue that mixed-use buildings are expensive to manage and a bit of a ‘Jack-of-all-trades and master of none’. However, since most of Vietnam’s larger office buildings incorporate either residential and / or retail elements, this would seem to be being unnecessarily pedantic, especially in the context of Vietnam where considerations such as location, management and on-going maintenance programmes need to be given additional weighting to compensate for any such perceived design deficiencies. Having taken all of relevant factors into account, one is than able to make some sort of sensible assessment of the quality of one building against others in the locality. We have concluded that ‘international standard’ buildings can best be described as being those that have been designed and constructed in accordance with widely recognized international standards (Grades A-C) with the others as Grades D-E. This does not necessarily infer that all of the many such locally designed and built buildings are unsuitable for occupation by most foreign invested enterprises (FIE), but that they are usually unsuitable for multi-national corporations (MNC).

Hanoi

Hanoi is a relatively small province (921sq.km compared with HCMC’s 2,095 sq.km) with 12 Districts : Soc Son, Dong Anh & Gia Lam - northeast of the Red River (663 sq.km) - and Tu Liem, Thanh Tri, Tay Ho, Cau Giay, Thanh Xuan, Hai Ba Trung, Dong Da, Hoan Kiem and Ba Dinh – of which the last 7 represent the central and ancient core (84 sq.km)

 

General Overview

This central part of Hanoi is densely populated with about 1.5 million people. There are very few buildings above 4-6 floors and almost all were built since 1975 and most in dreadful condition. Infact, according to a recent survey 5% must be destroyed as soon as possi­ble and 62% in need of upgrades. Because of the small nature of the building stock, the small roads, and the flat geography, there are very few genuine landmark buildings except for the few with lakeside locations.

The imminent construction of the country’s tallest building on Lieu Giai Street in Ba Dinh near the Daewoo Hotel will signal a change as the capital city starts to develop some buildings worthy of its capital status. The USD$114.6 million 65 floor Hanoi City Tower is being developed by Coralis Vietnam (a venture between the Luxembourg registered Coralis SA & LOHR Industrie) which has, exceptionally, received a 49 year 100% FIE (foreign invested enterprise) licence. It is capitalised at USD$114.6 million with USD$53 million in legal capital and will provide 200,000 sqm of office accommodation, apartments & retail space. Extraordinarily, in itself this one building has the potential to triple to amount of Grade A office space in Hanoi, since the cumulative total stock in 2005 was only about 80,000 sqm. This risibly low figure is both an indictment of the foreign investment laws (regarding real estate) and of the ability of the Hanoi People’s Committee ability to attract investment. However, the new Land Law and the granting of a 100% FIE licence to Coralis are hopefully signals of a new beginning; of a new “Second Wave� of foreign investment in real estate.

The capital city's population has increased remark­ably in recent decades. The city was home to more than 3 million in 2004, with an average density of 17,868 people per kilometre. How­ever, this rate is much higher in the central districts. The most densely populated is Hoan Kiem District and especially Hang Bo Commune. The high density popula­tion results from the fact that each person in these areas have an average living space of only 2 square metres. This has hit the city's infrastructure system hard, especially in the Old Quar­ter, where many generations still live in the same house together. Because almost all of the narrow, twisty roads are lined with tiny shop-houses with ground floor retail accommodation, development sites for ‘international standard’ buildings ie @1,000 sqm, are almost impossible to assemble. The only large sites are typically owned by current or former (post equitisation) SOEs (State Owned Enterprises), the Communist Party, the People’s Committee, or the military, none of whom have any desire what-so-ever on selling nor much more motivation to do so. However, as and when the new Bankruptcy Law is enforced some of these sites shall inevitably become available, albeit probably by way of limited 30-50 year Joint Ventures, which need to be compared to the situation in China where Joint Ventures can be for 70 years and where foreigners can own 49% of any domestic company. By contrast, in Vietnam – even after the Enterprise Law – foreigners are able to own zero percent of local real estate / development companies, since it is regarded as a ‘sensitive’ sector, which presumably infers that no foreign investment is a good thing?

International Standard Office Accommodation

Until 2004 the cumulative total of international standard office accommodation stood at only about 50,000 sqm virtually all of which were developed by foreign invested joint venture buildings between 1994 & 1997 - which means that they were / are 1st Generation property investments. Because virtually no new accommodation was added until 2004 vacancy rates have always been low and there has / is / will always be a large core of affluent MNC (multi-national companies) who consider it appropriate to have their country manager and / or head office in the capital city, close to the Ministries, who demand and can afford international standard office accommodation.

In 2004 the USD$32.9 million Vincom City Towers (by a group of Viet Kieu from the Ukraine who operate as Vietnam General Commercial JS Co - Vincom) & USD$18 million Ocean Park (by the Ha Noi Maritime Holding Co - Marina Hanoi) added about 65,000 sqm of international standard accommodation, perhaps unsurprisingly, all of which leased within about a 6 months, reflecting the degree of pent-up demand for ‘quality’ office space at (the then) ‘relatively’ affordable prices of between USD$17-22 / sqm depending upon floor level, size, term, etc.

Occupancies have been over 90% at all of the larger established, foreign invested properties since about 2000, which in many respects should be regarded as full occupancy, given the short-term nature of most FIEs business plans in Vietnam eg Allianz, and the short term nature of leases in Vietnam. Rental rates are therefore high, and given the absence of significant additions to the total stock for a couple more years, look set to rise even more as demand for city centre accommodation will continue to far outstrip the supply – especially given WTO accession and the continuing impact of Vietnam’s “ASEAN Free Trade Area� (AFTA) implementation, with effect from 1st January 2006, and the increasing demand from domestic enterprises to up-grade to international standard accommodation.

However, there are an ever increasing supply of Grade B and the smaller Grade C-D buildings being built that are suitable for those companies willing to be based @15-30 minutes drive from the central ‘ancient’ core of Hanoi, such as Hoa Binh Towers on Hoang Quoc Viet in Cau Giay or Bitexco’s Manor complex near the new national assembly & national sports stadium in Tu Liem District.

Infact, 2006-2007 will see over 1250,000 sqm of such space built which may / should have a dampening effect on rentals for Grade B-C-D accommodation including,

  • In 2006 space at : Pacific Place @18,500 sqm at 83b Ly Thuong Kiet in Hoan Kiem District; Hoa Binh Towers @1,500 sqm on Hoang Quoc Viet in Cau Giay District; ICC Building @4,500 sqm on Nguyen Chi Thanh; VIT Tower @15,000 sqm at 519 Kim Ma in Ba Dinh District; Opera Business Centre @4,000 sqm on Ly Thai To; Dragon Building @5,500 sqm on Tran Duy Hung; Devyt Building @3,000 sqm at 5 Dao Duy Anh; North Asia Building at 9 Dao Duy Anh; Toserco (Tourist Service Company) on Kim Ma in Ba Dinh; Hacinco Building & DMC Tan Long Building;
  • In 2007 space at : the USD$2.2 million Artexport Building No.2 @3,500 sqm at Pham Su Manh; Viet Tower (A & B) @42,000 sqm at 1 Thai Ha in Dong Da District;
  • In 2008 space at : the USD$43.67 million BIDV SMART Tower @33,000 sqm at 194 Tran Quang Khai by the BIDV bank & Sinapore’s Bloomhill Holdings Pte Ltd; Bitexco’s USD$32 million the Manor Garden Officetel in Tu Liem; and Cau Giay Plaza at 260 Cau Giay; and in 2009 the Hanoi City Complex @50,000 sqm; and the Vinaconex Building at Trung Hoa in the Nhan Chinh New Urban Area.
  • Thereafter, one can expect considerable quantities of stock to be constructed at the USD$1.1 billion 148 hectare South Thang Long Urban project which will cover four wards in Tay Ho & Tu Liem Districts; the USD$1 billion residen­tial complex on a 400 hectare area in Dong Anh District around Vinh Ngoc & Tam Xa; the USD$236 million Northbridge Residential Project in Dong Anh; and at the USD$240 million Red River City.

However, in the short term, another interesting recent development has been the selling of long-term leases of office and apartment accommodation, under the pre-text that the ‘owners’ can then sub-lease,....which is debatable!

Pacific Place was the first foreign invested property to introduce such a scheme in mid-2004, with the intension of selling over 17,000 sqm of office space for 37 year terms at only USD$4.5 / sqm and apartments for between USD$1,800-USD$2,200 / sqm for 15, 25 or 42 years in order to quickly recover their investment. However, by the end of 2005, the owners realised that “there was no need to sell the lease rights any more as the company would be able to recover investment capital within 4 years� by leasing space in the convential manner on the usual 2-3 year leases at @USD$30 / sqm per month plus management fees. Cheaper Grade C-D buildings are currently available for @USD$20+ / sqm per month, typically plus 10% VAT and service / manangement charge.

Ho Chi Minh City

HCMC has a rapidly developing economy, well educated population and modern facilities. Average municipal economic growth is forecast to be 11.5% in 2005, compared to the country's average over the past 10 years of 7.4%. Residence’ average per capita income was US$1,800 in 2004 (compared to USD$420 nationally), and city authorities estimate that it will reach USD$3,000 by 2010

HCM City covers 2,095 sq.km, divided into 24 districts hosting an official population of more than 6.12 million. The southern business capital is a major transport centre, well connected by road, rail, water and air to the rest of the country, and internationally. The city has a network of rivers and canals spanning 2,900 hectares, which are convenient for both navigation and irrigation. The city's power, water and telecommunications are reliable. There are 14 industrial parks (IPs) and export processing zones (EPZs) in HCM City: Tan Thuan, Linh Trung 1&2, Tan Tao, Hiep Phuoc, Le Minh Xuan, Tay Bac Cu Chi, Cat Lai, Phong Phu, Binh Chieu, Tan Binh, Vinh Loc and Tan Thoi Hiep.

What most people (and maps) refer to as Ho Chi Minh City, infact only accounts for some 26% of the total area. The remaining 74% is basically split between the south-eastern mangroves & swamps of Nha Be, Binh Chanh & Can Gio Districts; and the northern-western low lands of Cu Chi & Hoc Mon. The city is undergoing ‘urbanisation’ so rapidly, that by 2020 the 17 inner city districts are expected to have a population of 5.8 million to 6.4 million, while the suburban area will have 3 million to 4 million residents.

Between 1999-2004 Ho Chi Minh City’s population experienced an increase of more than 1 million people or an average of 200,000 inhabitants a year, according to Municipal Economic Institure & the city’s Planning and Construction Institue, which also said that migrants account for 30% of the city’s 7 million people.

General Overview

As in Hanoi, development sites for ‘international standard’ buildings ie @1,000 sqm, are almost impossible to assemble with the only large sites typically owned by the Communist Party, the People’s Committee, the military, or current or former (post equitisation) Saigon based SOEs, of which the largest include the ‘Big S’s : -

1-SRECO or RESCO : - Saigon Real Estate Corp has a large land bank and numerous projects and intensions but, obviously finite & insufficient financial resources. In many ways, they have an unenviable job since, by their ‘quasi-governmental’ nature, they are expected to assist the local authorities in implementing their plans to build countless residential units & infrastructure projects. Since June 2004, RESCO has been a holding company (a bit like a chaebol) with many subsidiaries including the Housing & Trading Co; Binh Thanh District Housing Co; Go Mon Real Estate Co; District 3 Housing Co; Tan Binh District Housing Co; District 8 Housing Services Co; District 11 Construction & Trading Co; Building Materials Can Gio District Construction & Housing Co; Saigon Construction & Housing Co; Saigon 5 Construction & Trading Co; District 10 Construction & Real Estate Services Co; and Cho Lon Construction Housing Co.

2-Satra : - Saigon Trading Corpora­tion is the owner of the prime 9,200 sqm corner site on Nguyen Hue & Le Loi that currently owner occupied as Tax Plaza. A USD$121 million redevelopment project of the site promises a 43 floor mixed use development. They also own good sites on Hai Ba Trung; have stakes in industrial parks; a site on Phan Dang Luu in Binh Thanh; a site on Tran Van Kieu in District 6; the Saigon Supermarket on Ba Thang Hai in District 10; co-owner of the An Giang Commercial Center; the Artex Saigon building (Artex is another member of SATRA); a trade centre in Tien Giang province; and the former owner of the Diamond Towers project on 3,800 sqm bordered by Nam Ky Khoi Nghia, Nguyen Trung Truc, Le Thanh Ton & Le Loi (now owned by Saigon Jewelry Holding Company - SJC), to name just a few.

3-SaigonTourist : - Owner of the Continental; Majestic; Grand; Kimdo & JV partners in Saigon Domaine; New World; Sheraton;……it is a very long list including the prime 6,000 sqm ‘Flag Pole’ / Saigon Space s Ton Duc Thang that is about to be developed as a USD$64 million retail & apartment complex. SaigonTourist have projects in many projects from Phu Quoc in the south to Hue in the centre & Ha Long in the north.

4-Sunimex : - Otherwise known as Ben Thanh Tourist have a large mixed property portfolio including Cat Lai Industrial Park; stakes in Norfolk Mansion & Riverside apartments; the USD$8.5 million 15 floor Heritage House apartment project; the @USD$77 million 35 floor Vietcombank Tower on a 3,000 sqm site overlooking the Saigon River surrounded by Ton Duc Thang, Hai Ba Trung, Mac Thi Buoi & Phan Van Dat; the US$18 million 25 floor Le Loi Plaza on 1,500 sqm at 4-6 Le Thanh Ton; the long scheduled USD$524 million Saigon Cultural & Commercial Center project covering 10.4 hectares on 23rd September Park including a 5 star hotel, a 38 floor skyscraper, a 72,000 sqm commercial centre and many other state-of-the-art business & leisure facilities; an office development at 174 Ky Con; and several tourism projects nationally.

5-SAVICO : - Saigon General Service JS Co (SAVICO) is an affiliate of Sunimex and has large many prime sites and is an investor in the Times Square development and tourism projects like Ben Thanh – Non Nuoc; Long Hoa – Can Gio (with Fideco); Can Gio Eco-Tourism Resort and developer of a 3,000 sqm trading centre; several apartments & offices in District 1; a USD$10m housing project in Thu Duc; and a commercial centre in Danang.

Between them and their affiliates and partners, these conglomerates control most of the ‘best’ sites by virtue of their historic and current links with the local authorities and each other.

International Standard Office Accommodation

Ho Chi Minh City only has a combined stock of international standard office accommodation of about 250,000 sqm, an inadequate number relative to the ever increasing demand. Thus rentals have almost doubled in less than 5 years to the current levels. However, local investors have recently seen the investment opportunities available and are thus now rapidly filling the supply gap with a wide variety of new developments, both big and small.

Opinions vary as to how rentals at Grade A – B buildings will move over the next few years although most concur that Grade C – E rentals will fall. By how much is good question given the still small size of most requirements of foreign firms (very few occupy over 250 sqm); the declining to stable number of expats employed coupled with strict new foreign employment registration stipulations; and the dramatic increase of total stock, countered against the inevitable increases in demand as more FIEs turn a profit and expand; the inevitable positive impact of Vietnam’s accession to the WTO; the continuing increase in interest from other ASEAN businesses following Vietnam’s implementation of AFTA (ASEAN Free Trade Association); and the increasing desire of local companies to ‘up-grade’ to purpose built office buildings with all the ancillary facilities & services that they provide in terms of security, back-up power and parking.

However, it is own view that ultimately office rentals cannot be higher that those charged in Bangkok (which for reference are currently @USD$19 sqm / month – after 15-25% increases in 2005 from @USD$16), which at the end of the day is far more developed physically, economically & legally and so far more attractive to foreign investors. Afterall, the only reason why rents are as high as they are today is because supply has not matched demand, which is a reflection not only of a general lack of foreign interest in Vietnam’s real estate market from @1996-2005; the limited financial capacity of Vietnamese developers (the entire stock market is only worth @USD$140 million of which about a third are only worth @USD$2 million combined); but mostly for legal reasons (see “Foreigners & Land� information sheet on the website) and the almost total unavailability of sites. Land has not been made available because Vietnamese people and companies have an almost irrational ‘affection’ for owning land, which partly stems from the fact that there is no landlord & tenant legislation; no statutory rights to renew; no cost to ownership; few investment alternatives; absence or failure to implement & enforce the bankruptcy laws; and the perceived kudos.

Local Standard Office Accommodation

The other segment of the market is building developed by local investors to local standards. In this respect, they can generally be considered as Grade D-E buildings. Usually, they have small floor-plates of less than 500 sqm and / or are in secondary or tertiary locations. Parking, back-up power, fire systems & escapes, and the general capability of the management and / or landlord are also considerations. Quality varies, as one would expect, but in common with their larger and more prestigious foreign invested counterparts, most have occupancies of over 90% and so are in a powerful position to dictate terms and conditions.

Short Term Future

Since the bottom of commercial property market cycle in 1999, when international standard serviced apartment accommodation rentals were as low as USD$14 per square metre a month, the average occupancy has steadily increased to the point was reached when average occupancies reached around 95%, which in many respects can be regarded as full occupancy given the periodic voids that come with short term leases. Naturally, landlords have and will continue to increase rentals to exploit the existing demand-supply imbalance, and demand 2-3 year contracts with large up-front rental payments and / or security deposits.

Although there are an increasing number of foreign­ers interested in developing sites - especially large plots close to the city centre where many perceive that rentals and values will continue to increase and remain consistently strong - most insist on ‘owning’ 100% FIE licences of at least 50 years. The unavailability of suitable sites and the numerous legal obstacles have sufficiently deterred most from investing and so rentals have now climbed in both the main cities to above USD$20 / sqm / month with the better / larger foreign invested buildings even above USD$30 / sqm / month +/- 10% VAT (Value Added Tax) & @5% Management / Service Charge.

New Supply – sqm : International Standard Office Accommodation

HANOI HCMC

2006
100,000
25,000
2007
50,000
75,000
2008
75,000
300,000
2009
300,000+
300,000+

On a world-wide comparison, London’s West End was the most expensive city for Grade A office space as at December 2004, recording about USD$125 per sqm / month, with Tokyo the most expensive in Asia at USD$80, and New York the most expensive in North America at USD$50. Other Asian cities recorded rentals of around : - USD$36 in Hong Kong (10% vacancy rate); USD$32 in Sydney (10% vacancy rate); USD$30 in Mumbai; USD$27 in Singapore (18% vacancy rate); USD$22 in Shanghai (10% vacancy rate); USD$15.50 in Bangkok; and USD$10 in Kuala Lumpur (22% vacancy rate).

Medium Term Future

As Vietnam further integrates into the world global economy and as the financial services sector better develops, inevitably more capital will be found for investment into commercial real estate. Because of the demand and supply imbalance and because office properties are the preferred real estate investment of many developers, we anticipate an enormous of new stock to be put onto the market over the next 10-20 years. Much of this will be in small Grade C – E buildings as existing properties are redeveloped, but a lot will also be comprised in large mixed use developments, such as the 200,000 sqm Hanoi City Complex and the 100,000 sqm Financial Tower in HCMC.

Hanoi

The capital’s latest urban development plan envisages the city expanding on both sides of the Red River, so that by 2020 it can accommodate an extra 4.5-5 million people. To this end, the People’s Committee is seeking about USD$3.2 billion in investment capi­tal for 16 property construction pro­jects to 2010 to develop several new urban & residential areas, housing, trade centres, office buildings and transport facilities. From 2003 to 2010, the urban area is expect­ed to increase about 2-fold and the area and demand for housing increase 4.5-fold. One of the city's main targets is expanding to the north & north-west, and west & south-west, with a new 8,000 hectare new modern town to the north along the Red River a main priority.

The following schemes are being planned : -

  • The long delayed Red River City has recently been reactivated and will include several high rise office buildings.
  • Luxembourg’s Coralis SA are developing the Hanoi City Complex project.
  • The Vietnam Construction Import & Export Co (Vinaconex) are planning to develop a new Head Quarters building.
  • The Manor Officetel will provide small, budget accommodation.
  • Sacombank are developing a 9 floor office building on Ly Thuong Kiet at a cost of about USD$4 million, some of which will be leased out.
  • Cau Giay Plaza will provide budget office space in Cau Giay district.
  • The 25 floor BIDV Tower on a 2,544sqm site on Tran Quang Khai.
  • The Viet Towers on Thai Ha in Dong Da will open in 2008.
  • The 15,000 sqm VIT Tower on Kim Ma in Ba Dinh.
  • The 5,000 sqm Dragon Building on Tran Duy Hung.
  • The 4,000 sqm Opera Business Centre on Ly Thai To.
  • The 3,000 sqm Devyt Tower on Dao Duy Anh

Ho Chi Minh City

The city is now home to more than 7 million people, and the figure is expected to reach 10 million by 2020. It has approximately 350,000 sqn of office accommodation, which by way of comparision with other major cities in South East Asia, is much smaller than central Bangkok’s over 2.5 million sqm; Makati City’s (in Manila) 2.6 mil­lion sqm; and Greater Jakarta’s 4 million sqm. Things are and will continue to change however, and some of the current & on-going development projects are :-

  • Thu Thiem Peninsula New Town : - This project is arguably the most important for the city’s future economic development (a bit like Shanghai’s Pudong in this respect), as it will link the existing long French-established District 1 with the 770 hectares banana-palm covered swamps on immediately other side of the river. The new town comprises An Khanh, Thu Thiem & An Loi Dong Wards and part of Binh An & Binh Khanh Wards in the city’s District 2.
  • Saigon Pearl : - Situated on Nguyen Huu Canh in Binh Thanh District between District 1 and the Saigon Bridge / Highway No 1, the site is being developed by a 50%-50% JV between Hong Kong’s Vietnam Land & SSG Construction & Real Estate Company (Vietnam Land SSG Ltd) to provide 8No. apartment blocks of upto 37 floors and 2-4 officer towers of between 13-25 / 40 floors each & 126 villals. The 10.4 site on river opposite the Thu Thiem peninsula was acquired at action for USD$56 million ie @USD$540 / sqm and will be developed to provide a total of 2,112 apartments between 82-328 sqm. Viet Trang Import Export JS Company is heading a conglomerate of enterprises who have clubbed together to pay for the USD$156 million project. The Bank for Agriculture & Rural Development (BIDV) have loaned USD$32.3 million, accounting for 60% of the investment price. Vietnam Land is a JV between seven Vietnamese and a Hong Kong partner that includes the Sun Wah group and Japan's Marubeni Corporation. Prices are being quoted at between USD$1,200-USD2,000 / sqm.
  • Bitexco Commercial Complexes : - The Binh Minh Trade Import Export Company (Bitexco) is planning to develop two huge high rise office & apartment complexes covering about 10 hectares in the down-town areas of Ma Lang & Ben Thanh. The buildings will be between 40-55 floors and the investment required is estimated in the region of USD$460 million. More than 1,800 houses and 13 offices will be affected and compensation is anticipated to be about USD$80-100 million.
  • Saigon M&C Tower (formerly ‘Saigon Spaceship’ site) : - At the end of 2001 Saigontourist bought out the foreign partner (Cibex International & Societe de Development Hotel Pointe des Blageurs) in the mid-1990’s dormant USD$76 million JV, that had a licence to build a hotel, office, shopping & apartment complex. The site is arguably the most central in Sai Gon since it is at the end of Ham Nghe opposite the Cot Co Thu Ngu flag-pole. A new @USD$31.8 million JV has been formed between Saigontourist (30%) and Saigon M & C Real Estate Co (60%) and Thu Do Land Company (10%), to develop the 6,000 sqm plot with revised USD$65 million plans for a striking looking 40 story shopping mall, apartment complex & office tower. The apartments will all have 3 bedrooms and range in size from 150 to 200 square meters and are provisionally being quoted at @USD$2,700 / sqm making the them the most expensive in the country.
  • e-Town 2 : - Darling of the stock-market REE (Refrigeration Electrical Engineering Corp) have recently increased the number of their popular shares to realise capital to develop the 26,400 sqm USD$15.7 million property next to e-Town 1 in Tan Binh by the airport.
  • Le Loi Plaza : - Gemadept, Vietnam's largest shipping agency, has bought a 45% stake from Hong Kong's Keangnam Enterprise Ltd in Le Loi Plaza to develop a 25 floor office building on Le Loi Boulevard.
  • Fideco VSC Building : - Foreign Trade Development & Investment Corporation (Fideco) is developing a 20,968 sqm 18 floor property on Ham Nghe after taking over VSC Properties of Thailand interest in the Building Investment & Services (BIS) JV project.
  • Sunimex OVC Building : - Ben Thanh Tourist Company (a subsidiary of Sunimex), has taken over the 60% Singaporean owned stake in the mid-1990’s USD$8.5 million Orient Vacation Company (OVC) JV and is teaming-up with AA Architect Construction Company to form a new USD$10 million JV to build a 15 floor office block.
  • Vietcombank Tower : - A JV between Ben Thanh Tourist & Vietcombank with Hong Kong Bonday Investments are looking to revive a long dead project to develop a 3,232 sqm site for USD$55 million as a 35 storey office & retail building with 77,000 sqm of space on land at Me Linh Square bordered by Ton Duc Thang & Hai Ba Trung.
  • Financial Tower : - Bitexco is investing USD$100 million in building a stunning looking 60 floor steel & glass walled commercial & financial centre just off Nguyen Hue on a site bordered by Hai Trieu, Ho Tung Mau & Ngo Duc Ke which will provide 100,000 sqm of space in the tallest building in HCMC if not Vietnam.
  • Sacombank Tower : - The HCMC based bank are developing a 17 floor 17,700 sqm office building adjacent to their current HQ on Nam Ky Khoi Nghia (the airport road), in District 3 at a cost of about USD$6.4 million with the Tan Dinh JS Im-Ex Co – Tadimex at a cost of USD$15 million..
  • Manor Officetel : - This USD$35 million development is the Phase 2 of the Manor HCMC development and is being designed as a combination of office & residence space. The development, locat­ed on Nguyen Huu Canh street, will feature 456 units of between 35-50-148 sqm. The concept is that a business can use part of the apartment as office space during the daytime while lodg­ing in the other part with family at nighttime.
  • BTH Building : - Construction Company 586 (a subsidiary of Cienco 5), are developing a 3.55 hectare site at the corner of Le Dai Hanh & Ba Thuag Hai in District 11 at a cost of about USD$190 million.
  • Southern Seed Tower : - The stock market listed Southern Seed Company is planning to invest USD$40 million to de­velop a 20 floor office & apartment building on a 7,000 sqm site on Le Van Sy, where the com­pany has its headquaters.
  • New World Tower : - A joint venture between New World Hotels Holdings Hong Kong & Saigontourist Holding Company (which built the 560 ­room New World Saigon Hotel), is looking at developing the adjacent 1,850 sqm corner plot as a 25-35 floor office building for about USD$25 million.
  • Gemadept Tower : - Stock market listed Gemadept (General Forwarding & Agency), are still planning to develop a long discussed USD$18 million office building on a small site on Le Thanh Ton.
  • Quang Trung Software City (QTSC) : - Situated about 12 km north­-west of the city center, work is about to start on 4 projects to build 6 office and residential buildings. Three companies will spend USD$13 million building the 4 office blocks with total floor space of 44,000 sqm including the Saigon Intelligence & Sunrise buildings. The park’s director recently also claimed plans of developing a total of 200,000 sqm of office accommodation for tenants.
  • LCT Apartments : - ASC-An Phu Development Company is developing a 17 floor USD$6.4 million office and apartment building on a 2,000 sqm on District 3’s Ly Chinh Thang. The 1st-2nd floors will provide office space with 80 fully furnished apartments on the 15 floors above. The price of apartments is quoted at @US$1,500 / sqm.
  • September 23rd Park : - This long ‘dead’ JV earned the pseudonym ‘The Black Hole’ due to its scale and decade of inactivity. Located on 10 hectares of the 23rd September Park that is surrounded by Cong Quynh, Pham Ngu Lao, Ton That Tung & Nguyen Trai near Ben Thanh Market, this 1995 70-30% USD$525 million Vijico JV (Saigon Cultural & Commercial Complex - SCCC), between Taiwan’s Jin Wen Corporation and the Urban Development Service Company – UDESCO - (15%), the Public Park & Greenery Company (9%), and Ben Thanh Tourism Service Company (6%)/ went 100% locally owned in 2005 when SRECO (Saigon Real Estate Corporation) took over / were told to take over the foreign partner’s stake in this long ‘dead’ project. The JV envisaged developing a 5-star hotel with a 38 floor skyscraper, a 72,000 sqm commercial centre and many other state-of-the-art business & leisure facilities. In 2006, Korea’s LG Engineering & Construction (LG E&C) negotiated a deal as an incentive as part of developing the new 14 km Tan Son Nhat-Binh Loi outer beltway new ‘airport road’, the rights over a 1.2 hectares plot in the former SCCC JV. There are reports that they now plan to develop a mixed use commercial residential scheme on the site including a Xi (Extra Intelligent) Park Tower – one of Korea’s top serviced apartment brand-names.
  • SPN Tower : - Situated on Nguyen Thi Minh Khai the property is being developed by Sao Phuong Nam and will provide about 16,000 sqm of office space.
  • Artex Building : - This wonderfully located 800 sqm site opposite the Opera House and Caravelle on the corner of Le Loi & Dong Khoi is being developed by RESCO for Artex Saigon (a subsidiary of SATRA) as a 7 floor USD$3.6 million building, partially for owner occupation. The ground floor, mezzanine & 1st floor will be to accommodate this handicraft company’s products with offices in the 5 floors above.
  • Petro-Vietnam Tower : - This wonderful site & extraordinary building at the end of Le Duan opposite the zoo was bought by Petro-Vietnam in mid-2002 off the HCMC government for its oil & gas management southern Head Quarters and other subsidiaries. The building will require a reported USD$30 million and has been a concrete skeleton for about 8 years, though slow progress is now being made on completing it. The local government had previously intented the tower to become home to the representative offices of the Hanoi based Ministries\
  • Broadway 2 : - The Broadway Office Park about 15 minutes drive from the centre, comprises 5No small 3 floor blocks with more being developed. Blocks A & B provide about 3,200 sqm and Blocks C-E about 9,700 sqm and have been designed to specifically accommodate the needs of large space users with the ground-floor space used for showrooms & stores.
  • South Saigon New Urban Area : - This huge project covers part of Ward 7 in District 8 - Tan Phong & Tan Phu Wards of District 7 - An Phu Tay, Phong Phu, Binh Hung & Hung Long Communes of Binh Chanh District, and has so far attracted 17No. foreign invested projects with a total registered capi­tal of over USD$850 million and 79No. local investors with @USD$685 million. In 2006, the People's Com­mittee approved the areas expansion from 2,612 hectares to 2,975 hectares. This addition / southern section has many advantages due to recent infrastructure improvements such as the Tan Thuan 2, Nguyen Tri Phuong & Nhi Thien Duong bridges, and the future 1,171m Nguyen Van Cu Bridge.
  • Phu My Hung (PMH) : - The formation of the Saigon South urban area on 2,600 hectares is meant to create conditions for urban and rural districts in the surrounding areas of District 7, District 8, Nha Be and Binh Chanh to develop. After years of relative inactivity, the 600 hectare @USD$250 million PMH Joint Venture started have construction of the first of many planned apartment buildings and houses. Several international schools; the Franco Vietnam hospital; RMIT (Royal Melbourne Institute of Technology) University; and other such ancillary service suppliers & facilities have also committed to a future amongst the landscaped greenery. The government have now also approved the construction of the 1,950m long USD$114 million Phu My bridge, that will connect the city ring road (that runs through PMH) with the CBD via the 770 hectare USD$632 million Thu Thiem New Urban Area of District 2.
  • Phuong Nam Plaza : - Situated in the Saigon South new urban area, this USD$50 million property is being developed by the privately run Phuong Nam Company as 3No. 20 floor “Uâ€? blocks on a 6,000 sqm site. Phuong Nam are co-­operating with Switzerland’s Tradco Global Engineering & Construction on the project.
  • BIDV Tower : - The state run Bank for Investment & Develop­ment of Vietnam is developing a 40 floor building that will provide over 100,000 sqm of accommodation at over USD$100 million.
  • Times Square : - This long delayed 1996 JV between Larkhall & Savico will cost an estimated USD$95 million and provide high end retail, residential, office & hotel accommodation on a 4,500 sqm site on Dong Khoi in the very centre of District 1.
  • BaoViet Tower : - The state insurance company is developing a prime site adjacent to the Metropolitan on Dong Khoi in a USD$11.3 million 15 floor office building that will cover about two-thirds of the site and provide about 18,000 sqm of accommodation, partially for owner-occupation.
  • Hoang Quan Plaza : - Situated in the District 8 section of the Saigon South Urban Area, the USD$44 million complex is being developed by Hoang Quan (95%) & Lang Thanh to provide 9 high-rises of 15 to 18 storeys with 653 apartments of between 90-222 sqm, with 14,000 sqm of office accommodation, and a 20,000 sqm shopping centre on a 3.76 hectare site. The quoted price for apartments is between USD$1,200­-USD$1,400 / sqm and purchasers obtain 10 year 60% loans from the Mekong Housing Bank.
  • Asiana Plaza : - The 13,600 sqm Kumho Saigon JV was licensed in 1996 to build a USD$223 million com­plex on the corner of Le Duan & Hai Ba Trung comprising a luxury apartment & office building with a 5-star hotel and shopping centre. Korea’s Kumho 65% stake was purchased by Saigontourist and the District 1 Housing Development Company in 2005.
  • Satra Commercial Centre : - The Saigon based conglomerate are planning to redevelop a 6,000 sqm super-prime site next to Tax Plaza on the corner of Nguyen Hue and Le Loi at a cost of USD$100-120 million. The 30-35 floors of space will include a commercial section, offices, con­ference facilities & a car-park and reports says investors from Malaysia, Singapore, US & Switzerland have showed interest in Joint Venturing including Malaysia's Shangri-La, Thailand's Central Plaza, Hong Kong Land.
  • Hung Vuong Plaza : - Situated in bustling District 5, the USD$33 million property is being jointly developed by local companies M&C Corporation and Kinh Do and will have two 29 floor towers with 276 apartments from the 8th-29th floors of between 117-128 sq.m. Kinh Do will occupy the first 7 floors of the plaza for a department store with luxury shops, offices, 20 restaurants and cafes, and five cinemas with a combined 1,500 seats. The Eastern Asia Commercial Bank (EAB) will provide 50% loans to purchasers repayable over 10 years.
  • VP Bank Tower : - This beautiful 1,000 sqm site on the corner of Ham Nghi & Pasteur is being developed by the bank as an 18 floor office building for its HMC Head Quarters and leasing, having been leased, presumably from a distressed customer, at the bargain price of only USD$1 million per annum on a 40 year lease
  • Saigon Sports City : Situated in District 2’s popular An Phu about 5kn from central District 1, the project is being developed by Chiap Hua (Hong Kong) & Keppel Land (Singapore) to provide over 3,000 condominiums with office and retail / leisure facilities on about 75 hectares.
Last Updated ( Saturday, 14 October 2006 )
 
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