Southern real estate businesses are still waiting for their turn to have their projects "rescued"

In 2024, Ho Chi Minh City will only have 8/86 real estate projects with legal problems resolved. Businesses expect that in 2025, the "rescue" of projects will be faster and stronger.

Southern real estate businesses are still waiting for their turn to have their projects "rescued"

In 2024, Ho Chi Minh City will only have 8/86 real estate projects with legal problems resolved. Businesses expect that in 2025, the "rescue" of projects will be faster and stronger.

Businesses line up for "rescue"

According to the Ho Chi Minh City Real Estate Association (HoREA), 2024 is a year full of expectations for real estate businesses with projects that are stuck in legal problems and need to be "rescued", when the Prime Minister has established a Steering Committee and Working Groups of the Government, the Prime Minister, Working Groups of a number of localities, including the Working Group of the Ho Chi Minh City People's Committee to coordinate and remove difficulties for real estate projects that are stuck in legal problems.

Metro Star project announced to be "rescued" in 2024.

Typically, in the first 10 months of 2024, the Prime Minister's Working Group 1435 transferred 64 projects to Ho Chi Minh City for consideration and resolution, and the Specialized Working Group of the City People's Committee held 10 meetings to consider and resolve 34 projects, of which 8 projects were resolved.

8 projects with legal settlement include: Song Viet Complex of Quoc Loc Phat Joint Stock Company; Construction of social housing area of ​​VTHouse Joint Stock Company and Tan Giao Joint Stock Company; project of Suntory Pepsico Vietnam Beverage Company Limited; Metro Star Apartment and Commercial Area of ​​Metro Star Investment Joint Stock Company; Tan Thang Sports and Residential Complex (commercial name is Celadon City - progress adjustment) of Gamuda Land Joint Stock Company; Land area of ​​over 11,000 m2 in Hoc Mon district of Western Saigon Joint Stock Company; Song Da - Thang Long high-rise residential area project, District 7 of Hung Thinh Incons Joint Stock Company; Binh Thanh District Education Area of ​​Tri Tue Company.

However, currently, Ho Chi Minh City still has 26 projects with problems that are being handled by the Departments, branches and Thu Duc City according to regulations. In particular, there are still more than 100 real estate and commercial housing projects with "legal problems" in the city that have not been resolved.

Many investors said they were forced to stop operations and were facing the risk of "bankruptcy" because their projects could not be "rescued" because businesses had poured billions of dong into these projects.

For example, Gotec Vietnam Co., Ltd., the owner of a luxury apartment project in District 7, has had to lay off most of its employees and operate two shifts a day. The company said that in May 2021, the Ho Chi Minh City Department of Construction granted the company a construction permit to build phase 1 of the project, with a scale of 2 basements and 1 above-ground floor. However, the project's construction permit was later revoked when the company had completed the basement foundation. The project's construction permit was revoked after Ho Chi Minh City reviewed the legal change of land use purpose and project transfer of Vegetable and Fruit Port Joint Stock Company (the unit that previously transferred this land fund to Gotec Vietnam Company).

The company representative said that the company is currently facing numerous difficulties. Currently, the company has lost about 1,052 billion VND in revenue and expenses. However, after many years of asking for help, the project is still "inactive".

Or like Novaland Group with a 32-hectare project in Thu Duc City. Novaland has completed the foundation of the apartment building, but had to stop construction since 2017, and from 2019 until now, Novaland has continuously asked to "rescue" the project but has not been successful. Not only this project, currently Novaland has dozens of other projects waiting to be "rescued" .

Phuc Khang Company is also a business that is waiting every day to rescue 2 apartment projects in Tan Phu district and Thu Duc city, in which the Tan Phu project has been in line for 7 years to be "rescued" but still has not had its turn, and the project in Thu Duc city has also been waiting for 5 years to be "rescued" .

Also waiting to be rescued despite having completed the project's foundation, the joint venture of TTC Land and Vietcomreal has not been able to "rescue" the Charmington Iris project. It is known that in 2020, this project had its construction license revoked after Ho Chi Minh City reviewed the transfer of the project's land fund from Saigon Beer Alcohol Beverage Corporation (Sabeco) in a joint venture with a Malaysian partner to establish Malaya Vietnam Company Limited (MVG), because at that time this land fund was a glass packaging factory serving the production...

Many issues to be solved in 2025

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA) said that according to data from the Ho Chi Minh City Department of Construction, in the period of 2015-2023, Ho Chi Minh City has 138 commercial housing projects approved for investment or approved for investment policy by competent authorities, at the same time as approving investors, but in reality, there are only 52 projects being implemented with a land use scale of 3,425,817.5 m2 (342.58 ha) with 41,637 houses, including 35,556 apartments and 6,081 low-rise houses.

In addition, there are up to 86 commercial housing projects that have stopped construction or have not yet been constructed. These are projects with legal problems, waiting to be rescued. However, because the investment policy has been approved, they are classified as "inventory" projects.

More specifically, according to Mr. Chau, currently Ho Chi Minh City has 30 projects that have stopped construction with a land use scale of up to 2,103,082.4 m2 (210.30 ha) with 21,676 houses, including 18,826 apartments and 2,850 low-rise houses. There are up to 56 projects that have not been constructed with a land use scale of 7,540,800.4 m2 (754.08 ha) with 32,375 houses, including 28,160 apartments and 4,215 low-rise houses. Among the 56 projects that have not been constructed, there is a project that is still in the process of site clearance, which is the Investment Project for Construction of Technical Infrastructure and Social Infrastructure of Tan Tao Residential Center - Area A, Binh Tan District, with a very large land area of ​​up to 329.96 ha.

“The 86 projects are in stock due to many reasons, mainly due to legal problems, which will be basically resolved in the near future with the system of laws and sub-law documents that have just been issued. However, having 86 projects in stock during the 2015-2023 period has led to negative consequences for the economy,” said Mr. Chau.

More specifically about the negative issues that these projects are causing, Mr. Chau said that with a total land use scale of up to 964.38 hectares of 86 "inventory" projects, it leads to an extremely wasteful situation of land resources, because it violates the principle of economical and effective land use of the Land Law.

In addition, the total number of houses in 86 "inventory" projects is up to 54,051 units, including 46,986 apartments and 7,065 low-rise houses, which increases the shortage of housing supply and the imbalance of housing products, leading to a phase difference in the high-end housing segment, a lack of affordable housing and is the main reason for the continuous increase in housing prices over the past many years, exceeding the purchasing power of middle-income and low-income people in society.

At the same time, the total of 86 "inventory" projects resulted in 86 investors falling into a dilemma, losing business opportunities, burying capital, while the resources of enterprises are also the resources of the economy and society.

“Therefore, the Association requests that competent state agencies urgently take action to remove difficulties to restart these inventory projects,” said Mr. Chau.

Mr. Vo Hong Thang, Deputy General Director of DKRA Group, said that 2025 will be a year of great expectations for real estate businesses with projects waiting to be “rescued”. Because when three sets of laws including the Law on Real Estate Business, the Land Law, and the Housing Law have been passed, these projects are also in the “rescue” phase and in 2025 they will be able to be successfully rescued. This is also the key to regulating the market and reducing the increase in real estate prices.

According to Mr. Thang, investors are currently making efforts to restart old projects and planning to join hands to implement previously abandoned projects. This development is expected to revive many projects, help real estate businesses continue to operate and increase housing supply for the market in 2025.

“In my opinion, after legal problems are resolved, the market will see more cooperation deals to revive old projects together. Investors with land funds that are under financial pressure will seek businesses with cash flow. New businesses, through joint ventures and mergers and acquisitions, will access beautiful land funds that are increasingly scarce in Ho Chi Minh City in the coming time. This will be a highlight of the market in 2025," said Mr. Thang.

Source: https://baodautu.vn/batdongsan/doanh-nghiep-dia-oc-phia-nam-van-cho-toi-luot-duoc-giai-cuu-du-an-d237469.html