Chairman of the HCMC Real Estate Association Le Hoang Chau said that in the long term, HCMC should auction golden land including plots in downtown area to bring a big revenue for the city budget and choose qualified investors to implement projects.
|Lavenue Crown project is now a parking lot (Photo: SGGP)|
Talking about solutions to tackle abandoned golden land plots in downtown HCMC, he said that the auction would prevent unqualified investors from struggling to obtain these land plots and then letting them abandoned because of insufficient financial ability as present.
In the short term, he said that city should permit free, transparent and public transfer of the land use right of golden land plots to seek suitable and qualified investors.
According to Mr. Chau, golden land plots have been abandoned in downtown HCMC because of spreading investment. Investors believed that they would yield big profit but things were not on plan when the real estate bubble burst affecting their financial ability.
Projects mortgaged for bank loans have become bad debts resulting in long undeveloped situation. Mr. Chau urged banks to join hands in restructuring projects and pump capital and lower interest rate for investors to continue construction.
A leader of the Department of Natural Resources and Environment attributed undeveloped projects at golden land plots to many reasons comprising inspection and land use purpose change. At present, the municipal authorities are tasking the Department of Planning and Investment to consult for the city about ways to tackle the long abandoned land plots in the center areas.
Among the abandoned land plot is the project at 23 Le Duan, District 1. The plot has been known after a noisy auction in 2015 when Tan Hoang Minh Commerce, Service and Hotel Company won the auction after beating 12 rivals with the total funds of VND1,430 billion (US$63 million). That was the record amount which the city obtained from auctioning land use right. The plot measuring 55x55m locates in Le Duan and Nguyen Du streets.
Unexpectedly after the auction session, the company did not pay the winning bid money attributing to price violations. At the end of 2016, the HCMC People’s Committee was issued an ultimatum that if the company did not make the payment, the auction session would be abolished.
|An undeveloped project in Le Thanh Ton, Le Loi, Nguyen Trung Truc streets, district 1 (Photo: SGGP)|
The company immediately transferred the amount to the State Treasury. HCMC Lottery Company has removed from the area but the old building has been abandoned while the ground floor has become parking lot.
Another abandoned project, Lavenue Crown complex, stretches in three streets Le Duan, Hai Ba Trung and Nguyen Van Chiem over 4,921 square meters. Investor is a joint venture of HCMC Housing Management and Trading, Kinh Do Corporation (KDC) and Mayflower Investment.
In 2015, inspectors spotted illicit share transfer at the state own housing firm and asked authorized agencies to investigate, causing the project delay until now.
The biggest victim of the delay maybe is KDC which owns 50 percent shares of Lavenue Joint Stock Company and has invested VND600 billion in the joint venture. The investment capital has increased to VND1,050 billion ($46 million) after seven years but the project is now just a parking lot.
Riverside Saigon One Tower at 34 Ton Duc Thang street positions in the intersection of Ham Nghi, Ton Duc Thang and Vo Van Kiet. The project has been half-done after breaking ground in 2009 instead of completing in 2011 as expected. Since 2014, the city has organized many meetings to solve difficulties and speed up the progress of the project without significant move.
With drastic instruction by HCMC leaders, the investor of another project at 1bis and 1k Nguyen Dinh Chieu street has started building foundation.
Meantime, the investor of SJC tower the land plot in four streets Le Thanh Ton, Nam Ky Khoi Nghia, Le Loi and Nguyen Trung Truc has organized groundbreaking ceremony after a decade of delay on December 2. Insider the gate of the plot, there has been only one excavator.