Ho Chi Minh city: Many real estate projects revive

Ho Chi Minh City leaders and departments have gradually solved problems in housing investment projects in which companies are facing difficulties. Especially after the recent meeting between the city leaders and enterprises, many projects have been restarted and continued implementation.

Restart after years of standstill

According to the City's leaders, the legal review of the projects recently was necessary so that investors could reorganize their operations and fulfill their financial obligations towards the Government not to lose national income. However, the review and inspection process has affected production and business activities of investors, homebuyers, secondary investors as well as the market environment.

Therefore, the city coordinated with the central authorities to soon draw conclusions on the projects subject to investigation and inspection, so that the investors would comply in priority additional financial obligations to the Government (if any) and then they will be able to continue to implement their projects.

Some projects have been restarted such as the project 76 Ton That Thuyet, district 4. This is a project built on public land origin, assigned by the Prime Minister to Khanh Hoi Glass Factory in accordance with Decision 607/TTg in October 1994. Later, Saigon Beer-Alcohol-Beverage Corporation (Sabeco) formed a joint venture with a Malaysian partner to establish Malaya Vietnam Co., Ltd. (MVG) to produce glass packaging factory for production.

The project at 628-630 Vo Van Kiet street was just removed difficulties by the Ho Chi Minh City’s Committee

After the arrangement, until now, the City People's Committee has approved for Sabeco HP to use more than 16,000m2 from the above-mentioned land area to invest in the Charmington Iris commercial-service-apartment center project. The project has a scale of 2 blocks of 35 floors, including 1,438 apartments developed by TTC Land Company and Viet Real Estate Trading Joint Stock Company (Vietcomreal).

Ms. Nguyen Thi Nhu Loan, General Director of Quoc Cuong Gia Lai Joint Stock Company, said that in 2019, her company had 12 projects suspended. At three meetings with city leaders in 2019 and 2020, there were 6 projects to be solved and implemented. Meanwhile, Ms. Luu Thi Thanh Mau, General Director of Phuc Khang Corp, said that the project at Luy Ban Bich street, which was stopped implementing in 2017, has now been removed difficulties by the city to complete legal procedures. and can be redeployed in this year, etc.

Mr. Bui Xuan Huy, General Director of Novaland Group, said that the City People's Committee and other departments are solving obstacles in some of his company’s projects. For example, the Co Giang Apartment project at 100 Co Giang street, located at Co Giang Ward, District 1, has been granted a construction permit by the City People's Committee and the Department of Construction. Project of commercial center-office- officetel and apartment at 151-155 Ben Van Don, ward 6, district 4, was approved the land use levy by the City People's Committee, Department of Natural Resources and Environment, etc.

In addition, the project of high-rise apartment building at 67 Mai Chi Tho street, An Phu Ward, District 2 and 7 projects in the area of Phu Nhuan District are also being evaluated by the Department of Natural Resources and Environment and other departments regarding of the land use levy, issuance permit for use of and properties on land to residents. Recently, the City People's Committee also agreed on option 2 from the Department of Construction's proposal to restart the project located at 628-630 Vo Van Kiet street District 5.

Specifically, this plan approves Saigon Vi Na Real Estate JSC to continue the project. The City People's Committee will assess the value of land use rights according to market prices on the basis of 2-3 independent certificates of value, which refer to the value of land use at the auctioned land in the nearby neighborhood, to ensure full collection of land use levy at market prices. This is a complex project of commercial centers, hotels, offices, high-class apartments with total area of over 31,000m2 and investment of more than 5,000 VND billion, which has been standstill for a long time because of matters relating to public land.

Resolve together with authorities

Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HoREA), said that in the current market context, the settlement actions of city leaders are very positive. However, there are still many issues relating to changes of law, of which the majority currently belongs to the field of public land, under the jurisdiction of the Central Government.

According to the regulation, public land must be auctioned. However, in the past, it was mostly assigned by the authorities resulting that some projects built on public land have been being suspended for legal review. For example, it is the 32-hectare project in Binh An Ward, District 2 of Novaland Group acquired the land fund of 21st Century International Development Co., Ltd. The project got an Investment Policy Decision No. 3990 / QD-UBND and was completing the relevant legal procedures, introduced by Novaland in 2018, with the name Water Bay located on Mai Chi Tho street, Binh Khanh ward, District 2. The project has a scale of 12 blocks including 5,000 apartments, 3,000 officetels and 250 shophouses.

“The suspension has affected the overall situation of the group, investor interests, as well as the city's business environment. Novaland has sent a letter of explanation and petition to the Government to consider and support the removal difficulties for enterprises to continue implementing project in order to stabilize business”- Mr. Bui Xuan Huy shared. 

In order to move forward, over the recent time many enterprises have actively proposed solutions. For instance, Him Lam Land requested to pay the land use levy in the form of an advance to be able to develop the project sooner, then they would fully pay when the official land use levy being issued. If this advance is made, many real estate enterprises can immediately deploy their projects.

According to Ms. Le Thi Bich Ngoc, Deputy General Director of Him Lam Land, the above mentioned one is a component project of Him Lam Residential Area at Phuoc Binh Ward, District 9, invested by Real Estate 10 JSC as the main investor. The project has an area of 2.16 hectares with 34 villa floors and has completed site clearance compensation since 2003 as well as construction of the project area's infrastructure since 2010.

However, Real Estate 10 JSC has not completed the site clearance and construction of the infrastructure system, as a result, the project has been inspected and investigated by the authorities. Therefore, the land has not been permitted for the company to fulfill obligations of paying land use levy and issuing red books to customers. “Him Lam Land proposed to perform the financial obligation at the rate allocated to the project, so that Real Estate Company 10 will be able fulfill its responsibility to build the main axis infrastructure according to the approved plan. We proactively propose to separate financial obligations, not only to help collect the national budget, but also to provide secondary investors with a basis for granting ownership to customers”- Ms. Bich Ngoc said.

Source: Do Tra Giang – Sai Gon Finance Investment