Many real estate investors begin to "renew" old goods

Some real estate projects that have been "shelved" for many years due to legal problems are showing signs of restarting.

Many real estate investors begin to "renew" old goods

Some real estate projects that have been "shelved" for many years due to legal problems are showing signs of restarting.

In recent weeks, the real estate market has been buzzing with the relaunch of the Gem Riverside Project (newly named DXH Riverside, Thu Duc City) by Dat Xanh Group. This project was opened for sale by Dat Xanh in 2018, but had to be stopped due to legal issues.

This is a key project that Dat Xanh has been implementing for the past 6 years. At that time, Dat Xanh opened for sale about 1,000 products, with an average selling price of 37 - 40 million VND/m2, but then proceeded to withdraw when the project's planning was adjusted to increase the population density and construction density to 12 towers, 3,175 apartments (the original planning was 8 towers, 2,100 apartments).

The new selling price of the project has not been announced. Regarding progress, DXH Riverside is expected to start construction in the first quarter of 2025, after completing negotiations with old customers and meeting the conditions for opening for sale in the second quarter of 2025, bringing in money for the business in the next 3 years, with total revenue estimated at VND 28,131 billion, net profit from the project estimated at VND 12,029 billion.

Another project is the NBB Garden III high-rise apartment complex (District 8, Ho Chi Minh City). After 16 years, Nam Bay Bay Investment Joint Stock Company has officially been approved by the Ho Chi Minh City People's Committee for investment policy and investor approval.

NBB Garden III is planned on a land area of ​​81,550 m2; of which the construction land area is 19,087 m2, the green land and traffic area is 52,036 m2, the public works land area is 10,426 m2. The total investment capital of the project is 2,706 billion VND.

It is known that Nam Bay Bay started to establish the investment policy for this project in December 2007. However, due to problems related to interspersed public land, land allocation for social housing development, etc., it did not meet the legal basis for approval of the investment policy. The enterprise said that in order to obtain the decision to approve the investment policy, the NBB Garden III Project had no less than 200 seals from government agencies.

In addition to the above two projects, the Southern market has recently recorded a number of projects starting to restart such as D-Homme (District 6), D-Aqua (District 8) and Lavida Plus (District 7) in Ho Chi Minh City; Astral City project (Thuan An City, Binh Duong); or Ecity Tan Duc urban area (Duc Hoa, Long An)...

Currently, the Ho Chi Minh City market is waiting for a series of projects to restart after the land use fee is removed in this fourth quarter. Among them, the Lotte Eco Smart City Thu Thiem smart complex project of Lotte Group (Korea) has an expected financial obligation of up to 16,000 billion VND.

Regarding this project, in recent meetings, Chairman of the Ho Chi Minh City People's Committee Phan Van Mai has repeatedly directed that financial obligations must be resolved for early implementation, thereby collecting tens of thousands of billions of VND in budget revenue. "Large projects must be resolved to promote overall progress, both to collect financial obligations and to have new investment, thereby creating jobs and developing other sectors," said Mr. Mai.

Eco Smart City is expected to have a total investment of VND 20,100 billion, built on a land area of ​​7.45 hectares. Of which, the project development land area is more than 5 hectares to build multi-functional commercial and service facilities and residential areas. The project was scheduled to break ground in September 2022, but has been inactive until now.

According to the Vietnam Association of Realtors (VARS), the resumption of previously stalled projects has been, is, and will continue to be promoted thanks to support from the Government and the private sector through mergers and acquisitions (M&A). According to the new regulations, if investors let their projects remain "inactive" for 48 months, they will face the risk of having their land repossessed without compensation, making investors more aware and urgent in their efforts to relaunch the projects.

Plans to develop previously abandoned real estate projects are also being promoted as the thirst for housing continues to increase along with economic development and urbanization. In particular, thanks to the participation of new investors, especially foreign investors through M&A activities, it is expected to help revive many projects.

“Restoring stalled projects is considered a key factor in helping real estate businesses continue operating. However, successfully restarting a project is not a simple matter. Even when legal problems have been resolved, financial pressure still causes many difficulties for businesses. This is also one of the reasons why some projects planned to revive but failed,” VARS emphasized.

Therefore, VARS notes that in the process of restarting shelved projects, businesses need to consider and calculate carefully. In many situations, they must accept low profits and break even to ensure the backlog is completely resolved.

Looking at the list of restarted projects, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA) said that the positive point is that there are projects that are allowed to mobilize capital up to 50%. Although this is not a radical solution, it has greatly supported businesses in the current context.

“To reduce housing prices, we need to increase housing supply, especially affordable housing. To increase supply, we need to thoroughly resolve stuck and pending projects. If we can resolve these projects, the market will have hundreds of thousands of new apartments,” said Mr. Chau.

Source: https://baodautu.vn/batdongsan/nhieu-chu-dau-tu-bat-dong-san-bat-dau-lam-moi-hang-cu-d228950.html