Becalmed project sees Germans jump ship out of stalled project

“The negotiation process has been completed. We are seeking official permission from the Ho Chi Minh City authorities and the Ministry of Planning and Investment (MPI) to take over Windhorst’s stake,” said Nguyen Duc Than Xuan, planning and business manager at Ben Thanh.
Xuan declined to reveal the price of the buy-out, but said it was much lower than the investment capital the German firm had invested in the project, also known as Ben Thanh Windhorst.
The $45-million project was licensed in 1996 to develop the twin apartment and office block of 45 and 55 storeys next to Me Linh Square in downtown District 1.
While Windhorst holds a 70 per cent stake, Ben Thanh Tourist contributes 30 per cent in land-use rights on the 3,232 square metre site.
The partners were forced to postpone construction of the project following the Asian economic crisis in 1997.
The MPI and the Ho Chi Minh City government then allowed the joint venture to extend its licence to 2001 and later to July 2003.
The foreign investor began negotiations with the local partner on a stake transfer last August and the negotiation process was completed early this year.
“The long-delayed project will go ahead after the transfer. Construction of the project is expected to resume this year after the MPI and the city government approve the takeover and the adjustment of the project’s design is complete,” Xuan said.
To suit the current property market, Xuan said the project’s design was being adjusted to 35 office storeys – still the tallest in Ho Chi Minh City so far – instead of two larger blocks of offices and serviced apartments.
“After taking over Windhorst’s stake, Ben Thanh Tourist teamed up with two other partners, Vietcombank and Hong Kong’s Bonday Investment Limited to develop the project,” he said.
The 35-storey building will cost an estimated $50 million to build. Ben Thanh Tourist and Vietcombank will hold a 70 per cent stake while the Hong Kong partner will contribute the remaining 30 per cent.
“With the cooperation with Vietcombank and Bonday, which has experience in a number of property projects in Ho Chi Minh City including Harbour View Tower, we hope the project will be fast-tracked,” he said.
Apart from Ben Thanh Windhorst, the Ben Thanh Tourist company is planning to construct another high-rise building in Ho Chi Minh City this year.
“The design of the building has been approved. Construction on the 15-storey building in Ky Con Street in the central city will begin earlier than that on Ben Thanh Windhorst building,” he said.
The project is capitalised at $10 million and the Ben Thanh Tourist can afford to develop the project by itself.
According to Xuan, there are three other delayed Ho Chi Minh City property projects in which Sunimex, the parent company of the Ben Thanh Tourist, was involved with foreign partners: Kumho Saigon, Larkhall Savico and Le Loi Plaza.