Haiphong developers stay ahead of curve

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A number of foreign developers established large apartment projects a few years ago to cash in on the rapid urbanization of the country’s third largest city.

However, locals are reluctant to purchase apartments as they can still buy land to build houses at cheap prices. As a result, sales of housing projects in the city have been so slow that some of them have not been able to get off the ground

These include Hong Kong-backed Qia Feng’s $85 million Our City project, located at Kien An district, which was licensed in April 2005. The 43-hectare project is still on paper.

The first launch of GNS Vina’s Cozy Ville and Khai De Vietnam Investment’s Tinh Thanh Quoc Te project in the first quarter of 2008 attracted little attention from customers.

To save the projects from the rapid tailspins, their developers have changed designs, sales and marketing campaigns.

Khai De Vietnam Investment Co has redesigned the $300 million luxury apartment Tinh Thanh Quoc Te project to lower-class style.

Floor plate of each unit is currently ranged around 52-120 square metres and sold at $395 per square metre whilst in the initial design featured apartments of 90-145sqm and the asking price was at least $583 per square metre.

The change was welcomed by the customers and raised the developer’s confidence.

Lam Vinh Truc, general director of Khai De Vietnam Investment, said that after changing, more than 70 units of the project was sold out in the first and second launched last year.

The company planned to raise the project’s asking prices to at least $483 per square metre in early 2011, said Truc.

“I believe that there is demand for apartments of local residents. Customers of our project would be considered as successful investors after completion of the project’s first section,” said Truc.

Pacific Investment has also changed the Cozy Ville apartment project at 2A So Dau street, Hong Bang district, into Grand Pacific. The development has also been redesigned with more smaller apartments, that has resulted in 38 more units compared to the initial design of total 342 units. The apartments are now equipped with more facilities such Cable TV, modern security systems and new interior decorations.

Michael Lee, director of M.Corp - the Grand Pacific’s sales and marketing consultant, said the new design would be the best fit for not only local residents to live, but also individual investors.

“With smaller area, the apartments at Grand Pacific is being offered at as low as $92,000 per unit. Therefore, the apartments will not only attract end-users but also be considered as an effective sound investment of those who come from other areas,” said Lee.

He said Haiphong was home to many foreign manufacturing projects, but the city still faced a dearth of serviced apartments offering affordable rents for expatriates living there. Existing serviced apartments projects such Sunflower are offered at high rents.

The developers of the 64 units Htower 1 on Van Cao street also transformed 30 units in the project into serviced apartments while the new 100-unit Htower 2, which was previously expected to be apartments for sale, is now planned condominiums for rent.

Bui Huu Anh, deputy general director of Thuy Duong Investment - developer of the 351-apartment TD Lakeside on Le Hong Phong street, said: “Currently, Haiphong’s apartment market is the same as Hanoi’s and Ho Chi Minh City’s five years ago. I believe that accompanied with the improvement of infrastructure systems, high urbanisation rates of the city and the strong increase in land prices, local residents will soon pay attention to apartment projects.”