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Waiting for golden values from golden lands   2010-01-26 - VietNamNet/SGT

Property developers often say there are three important things that help to bring success to their properties, location, location and location. That is why many realty firms have spent a lot of time and money looking for prime sites for their project development. It is easy to understand that big profit margins are what will return for their risky investments.

In big cities like HCMC, prime sites, which local media often call ‘golden lands,’ have been a hot issue. The property market witnessed some realty firms fight for a property tender over a prime site in the downtown area. It is paying attention to the subject as the municipal authorities recently kicked off a program to recheck land sites and properties which have been wasted or used for the wrong purpose, or leased for a monthly rent which is far lower than their values. Although it is seen as a sweaty task for the city authorities, the property recheck program sets steps to manage those properties in the city, waking up the potential in the land lots and making them generate more profit.

In recent property management activities, the HCMC People’s Committee agreed to withdraw a 5,000-square-meter site on the corner of Le Duan Blvd. and Hai Ba Trung Street to build a five-star hotel to serve accommodation demand. The decision will turn an old office building into a new property promising big returns for the city.

The move comes from a proposal from the building’s tenants, including Petroleum Transportation Corp., Saigon Spare Parts Corp., Chemical and Electrical Materials Corp. and HCMC Metal Corp., asking for cooperation to build a five-star hotel there.

The city authority in a recent document said the property was given to HCMC Management and Housing Trading Company for management, and it gave the nod to the State-run company to collaborate with those companies for the hotel development.

Nguyen Thanh Tai, permanent vice chairman of the HCMC People’s Committee, said in a statement that the project aimed to improve the effectiveness of land use and restructure the face of the city center in accordance with its scheme.

Tai said that once the project was carried out, current tenants would be offered a priority in investing capital into it and that if those companies were financially incompetent, the project owner would then call for capital investment from other developers or put the land up for tender.

The city plans to put six prime lots up for tender in the hope of maximizing their use and gaining more profits.

According to a proposal prepared by the HCMC Department of Planning and Investment, the six lots, which have drawn interest from local and foreign investors, cover some 790 hectares and are scattered in Districts 1, 3, 9 and Binh Thanh.

For example, the valuable 9,700 square meter land lot that is surrounded by Nguyen Du, Dong Khoi and Ly Tu Trong streets has been proposed for tender. Some others are in the Dan Sinh Market area in District 1, at the corner of Nam Ky Khoi Nghia and Huynh Thuc Khang streets in District 1, at 462-464 Nguyen Thi Minh Khai Street in District 3, on Binh Quoi-Thanh Da Peninsula in Binh Thanh District and in the Long Truong area in District 9.

Nevertheless, indicating prime sites for reinvestment is one thing, selecting capable investors to carry out the projects is another.

The property market witnessed two prime lots tendered last year, one at the intersection of Tran Hung Dao, Pham Ngu Lao and Nguyen Thai Hoc streets in the downtown area and the other at Van Thanh Market in Binh Thanh District. Many who lost in these tenders complained about the results.

Regarding the project on Le Duan Blvd., Tai instructs relevant organizations to calculate for total investment capital, speed up development and avoid wasting the property.

However, it remains to be seen how long it will take those valuable lots to be turned into new properties for the sake of profit.

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