Proposed Van Don zone rakes in cash

While Van Don SAEZ has not been approved yet, transactions are skyrocketing

Under the northern province of Quang Ninh’s strategic plan, with the zone spanning nearly 218,000 hectares over 600 islands and sea, Van Don, which is waiting for a nod from the National Assembly to become one of three special administrative-economic zones in the country, could earn VND53 trillion ($2.35 billion) for the state budget every year, as much as ten times its current contributions.

The plan also said foreign investors would be able to purchase and transfer realty in the zone and receive land allocations and land leases for production or business for no more than 99 years, as well as reduced corporate income tax of 17 per cent for ten years. The proposed incentives are making Van Don on the radar of infrastructure and real estate developers.

Along with Van Don International Airport invested in by one of the country’s leading property developer Sun Group and slated to be completed in October this year, Van Don would be connected by a highway linking it to the cities of Haiphong and Halong, as well as Cai Net-Con Ong Seaport.

In addition, the country’s longest highway, connecting the zone with the district of Mong Cai on the Chinese border, which is currently under way, would help the zone to develop similarly to Singapore and Hong Kong from improved access to the huge Chinese market.

Seeing the potential, Hanoi-based realty developer CEO Group has expressed intention to build a tourism complex covering a total area of 350ha at the zone’s Cai Bau Island.

Cao Van Kien, deputy director of CEO Group, told VIR that once Quang Ninh authorities agreed to the project, the company would partner with Japanese Nihon Sekkei and Accor as designer and manager.

“We are completing the legal procedures and preparing for the investment, hoping to kick it off this year,” Kien said.

According to the plan set for 2018-2022, the proposed complex will include a 5,000-room hotel complex, a water park, shopping centres and shop houses, as well as docks and a public beach. “In the first phase, we will develop a five-star resort offering 1,000 luxury rooms,” Kien said.

Along with CEO Group, other investors also plan projects in the zone. Viglacera Van Hai plans to develop Furama Resort and Villas Halong, while FLC Group wants to develop a high-end

entertainment and resort complex on Ngoc Vung Island, and MB Land plans the Cai Bau project in the northern part of the zone.

Sun Group, already investing in the first-ever privately funded airport of Van Don, also announced a mega-project of a high-end entertainment resort with casino covering 2,500ha, with a total investment sum of over $2 billion, on Cai Bau and Tra Ngo islands.

Meanwhile, Jonathan Hanh Nguyen’s Imex Pan Pacific, specialised in luxury brands and airport-based fashion, wine, and duty free shops, is also eyeing Van Don with an expected investment capital of $440 million.

Not only major domestic realty developers, but many individual investors have gathered to pour their money into real estate of different kinds in the zone ever since news of the special administrative economic zone’s (SAEZ) establishment was trumpeted last year.

According to the first-quarter report of the Vietnam Association of Realtors (VARS) 800 land transactions were recorded in the first three months of this year in Van Don.

Currently, land prices in area are 5-7 times higher than last year, while the liquidity level is at more than 70 per cent. Now, each square metre of projected land is rated between VND20 million ($888) and VND50 million ($2,222).

Nguyen Hai Nam, an investor from Hanoi, told VIR that land prices rose by about VND8 million ($355) per sq.m since the beginning of the year. He said it is a golden time for investment in Van Don, as the zone is still in an early stage compared to Phu Quoc Island in the south, also proposed as an SAEZ with a very high trading level at present.

Another investor from Hanoi, who bought a land lot of more than 100sq.m in Cai Rong town, told VIR that if he sold his land now, he could make at least 30 per cent profit.

However, “The hotter the area, the more carefully decisions should be made,” Nguyen Van Dinh, vice chairman of VARS, told VIR, stressing that the plan for the SAEZ has not yet been approved.

Dinh said investors should think twice before buying land in such a hotspot, avoiding traps by criminal land traders who would even try to sell non-transferred land or land set aside for delayed projects. Those land areas would have a very low rate of compensation.

According to Nguyen Van Thanh, Deputy Chairman of the Quang Ninh People’s Committee, the province will make the master plan for the zone public after finalising the legal status of all local projects by the third quarter of this year.