Hanoi is to offer investors US$7 billion (RM24.5 billion) worth of projects to develop prime land along the banks of the Red River that sweeps through the centre of Vietnam's capital, in the country's largest property development so far.
The project, advised by the government of South Korea's capital, Seoul, would replace a riverside swathe of mostly low-income housing in Hanoi into a modern urban area, with shopping malls, convention centres, condos and offices.
The city will next year begin resettling 170,000 people at a cost of US$1.56 billion to clear land for infrastructure construction, the Hanoi Architecture and Urban Planning Department said in a report on Sept 18, making available a 40 km-long riverfront area totalling 1,260 hectares (3,113 acres).
Officials said more than US$580 million would be needed to reinforce flood prevention dykes, and US$3.6 billion to develop malls, convention centres, condominiums and office buildings.
Once cleared, the land plots would be tendered to developers.
"Korean developers are especially interested in this project and they have many advantages including strong support from their government and the Vietnamese government," a Hanoi-based property consultant said.
South Korean developers such as Kumho Asiana and Keang Nam Enterprises are entering Vietnam's property market to cash in on soaring demand for quality office and residential space.
Dealers said Korean companies were chasing property projects worth a total US$4 billion, including a US$2.5 billion investment by Kumho Asiana in Hanoi in what would be the country's biggest convention centre.
Keang Nam last month began work on Keangnam Hanoi Landmark, Vietnam's tallest building, expected to cost US$1.05 billion.
Foreign developers, mainly from Singapore, Indonesia, Malaysia and South Korea, have pledged to invest billions in hotels, apartments and offices in Hanoi, Danang and Ho Chi Minh City amid a Vietnamese property bonanza.
Property prices, especially for apartments and condos, in big cities have increased by more than half in the past year to about US$1,000-US$3,000 per square metre, with most projects sold out before construction began, dealers said.
The government has promised to ease restrictions this year, dealers said, to allow resident foreigners and Vietnamese with foreign passports to own property, a move expected to boost prices further.
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