VietNam Business: District

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Wednesday, January 26, 2011

HCMC apartment market beginning to stir: report

In the Ho Chi Minh City property market, the apartment for sale segment saw both supply and demand rise in the third quarter, consultancy Savills Vietnam said in its quarterly report.

The supply of new apartments reached a record 16,600 units by the end of September, nearly triple the number from a year earlier.

Nearly 7,200 came into the market in the third quarter against 3,200 in the second and 2,900 in Q1.

The grade C segment saw the highest number of new projects, with the majority of them located in Tan Phu, Binh Chanh, and Binh Tan Districts.

The third quarter also saw the highest number of apartments sold in the primary market this year -- at approximately 4,400 units, they were equal to the cumulative number in the previous two quarters.

The majority of them, around 80 percent, were grade C units. Demand was mainly in the segment priced below US$1,000 per square meter, which saw sales of nearly 3,300 units.

Rising demand for apartments was fuelled by increasing disposable incomes and growing migration to the city.

The demand is expected to remain strong in the lower-cost segment where units cost VND800 million to VND1.5 billion ($42,000 – $79,000).

A further 26 apartment projects are expected to launch in the next two quarters, offering around 10,000 units.

In the next two years 104,000 new units will be built and put for sale.

Serviced apartments

There were around 2,950 serviced apartments of all grades for lease in the city, up 6 percent quarter on quarter.

Districts 1 and 3 alone accounted for 62 percent of them, with District 1 ranking first with 1,500 units.

With no new projects completed in Q3, the primary market remained unchanged at eight projects and approximately 800 units.

Almost 490 villas and houses were sold. The price of villa land ranged from $1,500 to $2,500 per square meter on average.

The Phu My Hung New Urban Area in District 7 accounted for 70 percent of the villas and houses that came into the secondary market and they sold at an average price of $600,000 –$2.8 million. HCMC’s population growth averages 3.5 percent a year, double the national rate.

With many projects being in the planning stage or awaiting licenses, the market is expected to add at least 9,500 villas and townhouses in the next few years, most in outlying districts like 9, Can Gio, Binh Chanh, Binh Tan, and Hoc Mon.

District 9 is likely to rank first in terms of total area of units and number of projects.

Between 2004 and 2009 around 1.6 million people migrated to the country’s southeastern region, with a million coming to HCMC alone, Savills said.

HCMC downtown still gold mine

Though becoming increasingly congested, District 1 and its neighbors District 7 and District 2 are still attractive to investors.

In the hotel segment, nearly 83 percent of future supply will be in District 1, concentrated in this district near the main tourist and business areas.

More than half of the 100,000 square meters of office space that will come into the market by year-end will be in District 1 buildings like Bitexco Financial Tower (37,000 square meters) and HMTC-Savico building (15,500 sq.m).

In the medium term, around 900,000 sq.m out of 1.2 million square meters will be supply in districts 1, 2 and 7.

In the retail segment, Districts 1 and 7 will account for 54 percent of the 700,000 sq.m of new supply by 2012.

Thursday, October 7, 2010

Private firms may back resettlement

HCM CITY — HCM City authorities have invited the private sector to invest in the city's half-completed resettlement plan for canal-side residents.

Nguyen Van Danh, deputy director of the Department of Construction, said the city wanted the sector to invest in the resettlement projects because the local government's budget was too slim.

Nearly half of the 15,000 canal-side residents of HCM City have already been relocated to flats as part of the city's resettlement plan.

The plan belongs to a city programme to clear the view along canals by demolishing houses along and on the canals, including communities in Tan Hoa – Lo Gom, Tham Luong – Ben Cat, Vam Thuat, Nuoc Len, Doi, and Te canals.

The plan still needs capital for demolition of 7,642 shacks and the resettlement of the families in districts 6,8, and Binh Thanh.

In return for investors demolishing houses, they would receive some vacant land along the canal.

The socialisation of the resettlement plan was piloted in District 8, but failed because 55 invited businesses refused to participate.

Last year, the city assigned a State-run real estate company – RESCO to be the investor of the projects.

The company has completed 629 houses and paid compensation to 784 out of 905 families removed from District 8's U Cay Canal; handed over 600 resettlement flats in District 7's Tan My Area, 176 flats in District 12's An Suong Area and would complete 350 other flats for residents being relocated from District 8's Ba Dinh Wharf.

Many of the resettlers were pleased to move away from their stilted houses by and on the canals. "I had a hard time living by the canal in District 8 as my husband and I had to stay alert at night to bail out the house when the tide got too high," said Huynh Thi Hong, a new resident in Tan My Apartments.

Nguyen Ho Hai, deputy chairman of District 8 People's Committee, said the plan had helped beautify the district and improve people's general welfare.

The construction department suggested that the People's Committee attract investors by offering them a 10-year loan of VND100 billion (US$5.1 million)at very low interest.

It also suggested that the occupancy rate on the land be raised. — VNS

Thursday, September 9, 2010

Work begins on HCMC 2nd metro route

Construction of a technical maintenance station for Ho Chi Minh City’s metro No 2 began yesterday at Tham Luong in District 12.

The US$1.24 billion Ben Thanh Market – Tham Luong route is expected to be finished in 2016 to become the nation’s first modern mass transit system.

The 19-kilometer system will be funded by loans from German development bank KfW Bankengruppe, the Asian Development Bank, and the European Investment Bank.

Later the route will be expanded beyond the Saigon River to Thu Thiem in District 2 and at the other end to An Suong also in District 12.

It will pass through Districts 12, Tan Phu, Tan Binh, 1, 3, and 2.

The underground system will carry 40,000 passengers an hour, covering the route in around 25 minutes. Commuters will have to pay a flat fare of VND3000.

It will have 10 underground and one elevated stations that will be disabled-friendly.

Work on the route is expected to begin in the next two years using new underground construction technologies that will make it unnecessary to block roads above, Nguyen Van Quoc of the Ho Chi Minh City Management Authority for Urban Railways said (MAUR).

Since the average depth of the metro will be 18 meters -- and 34 meters at the deepest point -- it will not have any impact on buildings and skyscrapers along the route, he added.

The city, which has a population of eight million that could rise to over 10 million soon, plans to build six metro and two monorail routes and a tramway and has identified funding for almost all of them.

A 12.5-kilometer tram route from Bach Dang Pier in District 1 to Mien Tay Coach Station in Binh Tan District has been awarded to Thanh Danh Co and the Malaysia-based Titanium Management.

But city authorities appraised their bid and have asked them to scale down the amount of VND4.2 trillion ($215.7 million). As a result, work on the project cannot start this month as scheduled, Thoi Bao Kinh Te Sai Gon Online (The Saigon Economics Times Online) newspaper quoted Nguyen Do Luong, head of the MAUR, as saying.

If they fail to reach agreement, their license will be revoked, Luong said.

Thai, Chinese, and Czech investors are seeking approval to build metro Nos 3a, 3b, and 4. The Ministry of Construction-run Development Investment Construction Joint Stock Corp and Dat Phuong Joint Stock Co have bid for the monorail No 2 project.

Work begins on HCMC 2nd metro route