Tan Hoang Minh Group withdraws after winning auction on land lot in Thu Thiem

Do Anh Dung, chairman of Tan Hoang Minh Group

On January 10, Do Anh Dung, chairman of Tan Hoang Minh Group, addressed a letter to General Secretary Nguyen Phu Trong and other Party and state authorities requesting to withdraw the decision to deposit the auctioned land plot in Thu Thiem. Tan Hoang Minh Group also accepted any repercussions for unilateral termination of the contract, he wrote.

Dung explained that this decision is being taken to help safeguard the stability of the real estate industry sector in Vietnam.

On December 10, 2021, Viet Star Real Estate Investment Co., Ltd., controlled by Tan Hoang Minh Group, won the auction of a land lot in Thu Thiem New Urban Area in Ho Chi Minh City with a total area of 10,060 square metres. The land lot was valued at $1.07 billion, which is roughly equal to more than $104,000 per sq.m. Tan Hoang Minh Group had deposited a sum of $25.6 million.

Dung had exceeded another foreign investor – Capital One Financial – a Chinese investor who proposed $1 billion for this land plot but fell behind Tan Hoang Minh.

The auction has triggered a heated debate. The Chairman of Vietnam’s National Assembly, Vuong Dinh Hue, also said during the new extraordinary National Assembly session on January 4-11, that this event was unprecedented.

Likewise, Ho Duc Phoc, the Minister of Finance, also agreed, saying the abnormally high land sale in Thu Thiem was "out of the ordinary" and "peculiar".

"Following the victory in the auction, the Tan Hoang Minh Group has studied a great deal of popular perception and believes that such a large winning bid may have negative implications for the real estate sector, particularly in light of the Minister of Finance's view at the NA's most recent extraordinary session," added Dung.

"We wish to consensually terminate the contract for the sale and auction of the land plot in Thu Thiem New Urban Area and thereby accept all administrative penalties associated with unilaterally terminating the contract in accordance with the provisions of the Law on Public Property auctions," said Tan Hoang Minh Group’s chairman in the letter.

Previously, Dung also explained why he opted to pay the abnormally high amount to win the bidding war. According to him, there were numerous investors that paid up to $869 million and subsequently abandoned their investments, leaving just one international investor. Presumably concerned that the most attractive land in Thu Thiem would end up in the hands of foreign investors, Dung offered to pay a 3-per-cent premium to secure the opportunity to participate in the bidding process.

"Over the years, I've developed a strong attachment to my home nation. Why is it the land, which is a significant resource in my nation, yielding profits for foreign investors? Why aren't Vietnamese enterprises able to compete with them in our country? I was baffled by these questions," he said. "So, I was determined to own this gorgeous piece of land in Thu Thiem New Urban Area – even though the asking price was considered 'crazy' by many."

Dung also disclosed that he planned to develop a skyscraper named D'Billionaire (the Billionaire building) in this area, targeting the rich and super-rich locals and foreigners in the city.

High-net-worth individuals, therefore, can come to Ho Chi Minh City to purchase apartments for a few million dollars – a price that is extremely affordable in comparison to the prices in their home countries.

"Several million dollars for an apartment is not a significant financial burden to the rich. The most challenging issue is to design a phenomenal housing project that would make them feel completely fulfilled, " Dung said.

In June 2015, Tan Hoang Minh won a bid for a 3,000sq.m land plot at 23 Le Duan in Ho Chi Minh City at $62.1 million. Right after that, Tan Hoang Minh requested competent bodies to delete the results claiming an incorrect auction process quotation.