Large-scale projects reactivate after years of delay

Saigon One Tower, along with other sizeable real estate projects, resumed construction (Source: imgur.com)

Hong Kong-based Alpha King Real Estate Development, the new investor in Saigon One Tower, is now finishing the project after a delay of more than six years. The residential, office-for-lease, and trading complex is expected to be put into operation next year.

The monolithic Saigon One Tower is the most visible victim of Ho Chi Minh City’s burst real estate bubble. Even though the skeleton of the unfinished $238-million skyscraper lies at the intersection of Ham Nghi and Ton Duc Thang Streets, marking it as an incredibly desirable piece of real estate, information about the stalled project has been nearly impossible to come by for years.

Previous investors in the project were Saigon M&C Company (49 per cent), Saigontourist Group (30 per cent), Dong A Bank (6 per cent), Dong A Securities (10 per cent), and Phu Nhuan Jewelry Company (5 per cent).

When construction abruptly halted in 2011, an estimated 80 per cent of the work had been completed, with only the glass facade and interior work left.

Tai Nguyen Company also recently resumed work on its Kenton project in Nha Be district (Ho Chi Minh City) after eight years of delay. Tai Nguyen proved its financial capability to finish the project at a signing ceremony with a range of banks, including BIDV, Maritime Bank, and SHB, worth almost $47 million in funds for the project.

Located on 11 hectares at the junction of Nguyen Van Linh and Nguyen Huu Tho streets in Nha Be district, the New Downtown Kenton Node Hotel Complex (Kenton) will be home to 1,338 apartments, 26 shophouses, 228 Avani hotel rooms, 565 Oaks condo-tels, a trading centre, a walking street, a clinic, a multimedia music and water show, and more than 1,000 office rooms for lease. The construction of Kenton has been on halt since hard times hit the property market in 2011.

In Hanoi, CEN Invest and Hi Brand Vietnam have signed a co-operation contract to develop the K-Park residential complex in Daewoo Cleve, a project that has also been in limbo for years.

K-Park will be comprised of three, 23-27 storey towers which will provide a total of more than 950 housing units to the market. Daewoo Cleve was started in 2009 and has been in delay for years because the investor, Inpyung Corp from Korea, could not raise sufficient funds to finish it.

According to Phan Xuan Can, director of Soho Vietnam, the agency behind many M&A deals in Vietnam, the greatest obstacle for the continuation of long-delayed projects was to reach an agreement between all related parties.

“Many long-delayed projects can now be resumed because the parties involved have finally agreed on a reasonable and acceptable way to rescue their projects,” Can said.

“The resurgence of the real estate market has brought about many opportunities for developers. Investors, bankers, and buyers have realised that they must come together to find solutions for their projects, instead of missing these opportunities,” he added.

According to the latest report from the Ho Chi Minh City’s Construction Department, more than 50 projects have been left delayed for years in the city’s downtown area. Among them, 14 projects were halted when construction was already underway.