“Golden land” plots in HCM City fall into foreigners’ hands

After the retail sector, foreign investors now eye the golden land plots in the central area of HCM City. Singaporean Mapletree Group has once again surprised the public when spending $215 million to acquire 100 percent of stakes to own Kumho Asiana Plaza. The building was owned by South Korean conglomerates - Kumho Industrial Company and Asiana Airlines, each of which held 50 percent of stakes.

Prior to that, the investor carried out a series of merger & acquisition (M&A) deals. It bought Centre Point, an A-class office building on Nguyen Van Troi street in Phu Nhuan district in 2013 at the price of US$54 million. It cooperated with Saigon Co-op to developed Vico City, a shopping mall, in district 7.

As such, the properties that Mapletree is now managing in Vietnam are worth over US$730 million. 

Meanwhile, the manager of the Singaporean group said it is still seeking opportunities to take over completed real estate projects which can bring immediate revenue in large cities like Hanoi and HCM City.

Just next to Kumho Asiana Plaza, an imposing office building – Ngoi Nha Duc - is arising. Developed by a foreign investor, the building will provide 30,000 square meters of office to the market once it becomes operational.

Recently, a building on Le Duan street – Diamond Plaza – was taken over by South Korean Lotte Group, while Saigon Tower now is owned by Japanese Daibiru.

In the latest news, AB Tower, an office building on Le Lai street has fallen into Japanese hands after an M&A deal worth $47 million.

However, the opportunities for foreign investors will increase as HCM City authorities are considering more open policies.

The city plans to auction 23 golden land plots in 2016 with total area of 137,700 square meters. Meanwhile, no auction was organized in the first half of the year.

In 2015, HCM City witnessed the failure when auctioning the land plot with an area of 3,000 square meters at No 23 Le Duan street. Tan Hoang Minh Company then refused to pay the amount of VND1.43 trillion it promised. 

This could be the reason why the city’s people’s committee has become more cautious with the sale of land, though sources said investors are eyeing the land plot.

Analysts say the war to acquire golden land plots will be fierce in the time to come. Reports showed that real estate remains the favorite sector for foreign investors. By February 2016, total foreign investment in the sector had reached US$14 billion.