Prime HCMC land fetches $310 million

Vietnam Real Estate - Ho Chi Minh City authorities have approved a VND5-trillion (US$310 million) consortium bid for a prime land lot in District 1. The consortium plans to build a 55-story skyscraper on the 1.3-hectares in the so-called “golden triangle” between Tran Hung Dao, Pham Ngu Lao, and Nguyen Thai Hoc streets in District 1. Bids on the land closed in December and the auction council submitted results to the city hall for ratification three months ago. The bidders were scored on a scale of 100 based on criteria like development ideas, financial capacity, experience in implementing similar projects, and how much they could contribute to the city treasury in the form of an assistance fund. The winning consortium, made up of Thai Son Construction Company, Chi Thanh Investment Company, Anh Duong Financial Investment Company, Bank for Investment and Development of Vietnam, Hanwha Construction Company, Hanshin Construction Company, and Hanwha Galleria Company, agreed to contribute VND1.9 billion ($121 million) to the assistance fund. The bid amount is not for the land itself but only for the right to use it. As part of the agreement, the consortium will also have to organize land clearance and payment of compensation to residents in the area. The auction winner will be responsible for relocating people out of the area and building a new high school to replace the existing Ernst Thalmann High School. The new development is expected to be finished within five years of the relocation of local residents and completion of the new school building. The auction council was chaired by Thai Van Re, Director of the HCMC Planning and Investment Department. Other council members were senior officials of the departments of city planning and architecture, construction and finance. Last February, city authorities had given the go-ahead to another $56.5-million bid made by a consortium of construction firms for a 6,000-square meter plot of land in Binh Thanh District. Clarification requested The bidding results could have been announced earlier but for a complaint lodged by a participating consortium. After the auction, one of the bidding consortia, comprised of Khanh Gia, Ssangyong, Doosan and Punkyung, asked the auction council to clarify the definition of an “assistance fund.” Khanh Gia Company, representing the consortium, asked the council to specify whether the group that lodged the highest bid overall would win regardless of other requirements or whether the bidder that promised the most assistance funding would be the winner. The company said if the assistance fund was a key factor for the auction committee in deciding the winning bid, the consortium would contribute additional assistance funds. A representative of the auction council told Thanh Nien last month the bidding document had clearly stated treasury assistance funds were not obligatory. Investors, therefore, would have to meet all other requirements, he said.