VietNamNet Bridge – After HCM City announced the list of 20 gold plots of land for investment, most people thought that investors would be vying for those sites; but actually, not all of them are attractive in the eyes of investors. The Eden quadrangle
Opportunities to invest in central HCM City
Investors vie for ‘golden land’
The information that Vincom will build two buildings at the Eden quadrangle and the current office of the HCM City Department of Education and Training has made many real estate companies ‘envious’. Many people even say that city authorities didn’t make public this case.
However, of the above sites, only the office of the HCM City Department of Education and Training is really attractive to investors, not the Eden quadrangle. Many investors have surveyed this plot of land and gone home.
The biggest problem associated with this land is that they would have to compensate local residents with a lot of money while they would not be allowed to build buildings of more than six storeys, in order to match the current landscape of the HCM City People’s Committee head office, which is located nearby.
An official of the HCM City Department of Planning and Investment said that many plots of land in the city’s centre, though called gold land, would not be attractive at all in the eyes of investors if the local government didn’t allow the construction of buildings of more than 20 storeys.
“Even the compensation is up to VND100 million (US$6,200)/sq.m; it is very difficult to get residents on those gold sites to move. Investors will suffer heavy losses if they are not permitted to build 20-30 storey buildings,” said Le Viet Hai, General Director of the Hoa Binh Construction and Real Estate Company.
The chairman of a group that is looking at a gold land plot in the city said: “Besides compensation for local inhabitants, which accounts for 50-60% of the total investment capital, we have to find places for resettlement and build a school for the local government. We have thought much about it but we can’t find any solution.”
Domestic and foreign real estate investors still remember the lesson of Kumho group, which owned a gold plot on Le Duan Street, District 1: it took the investor nearly ten years to complete site clearance, etc.
Still gold?
Gold lands that are offices of state agencies or those that are cleared already like the office of the HCM City Department of Education and Training, the Department of Culture and Information or Van Thanh market always attract 20-25 investors while the gold lands that are residential areas in Ben Thanh and Ben Nghe ward, District 1 seem to be unattractive.
Planning makers and architects have different ideas about investment in gold lands. Some support the construction of high-rise buildings like in Singapore, Bangkok of Thailand and Manila of the Philippines.
Others say that the city should be careful because if it only focuses on the current central area, the infrastructure there will be overloaded, the environment will be worse, etc.
Even Vice Chairman of HCM City Nguyen Huu Tin worries that if the city allows the construction of hundreds of high-rise buildings in the centre it will have to upgrade its infrastructure but this task is very difficult because it requires great investment capital and land.
Some architects raise the question: “Should the city focus construction in its centre while the neighbouring areas are spacious?”
Not only the planning of the 20 gold plots of land but that of many others in the centre of district 1 will be made public in 2008 while HCM City is determined to develop the Thu Thiem new urban area with many incentives for investors.
The general director of a foreign investment fund that has many real estate projects said: “When we are allocated land, if the public protests like in the case of LG or if the price of land in the city’s centre falls once the construction of Thu Thiem bridge is finished, the project will face many difficulties.”
He also said that once the city encouraged investment in the Thu Thiem new urban area, the current central area of HCM City would be “the western streets of Shanghai” though nobody knows when this will happen. However, “It is necessary to consider every aspect because hundreds of millions of US dollars of investment is not small,” he said.
That’s one reason why many investors are keeping an eye on rather than seeking every way to have a plot of gold land.
(Source: Tien phong)
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