Golf courses are set to mushroom in Ho Chi Minh City though the city lacks land for housing, hospitals, and schools. Why are investors fond of the golf business?
Golf courses are projected around the city
HCMC, though the first southern city to get a golf course, has just two golf courses yet - one in District 9 and the other in the Phu My Hung urban zone. A further 13 await approval or construction.
One of them will come up within the city, in Tan Son Nhat International airport. There will be five in the eastern suburbs, where District 9 is.
The Planning and Investment Department said six of the projects were approved by August. But several of them are waiting for residents to be resettled and land obtained for the courses.
Rach Chiec golf course project in District 2, for instance, was approved in January 2001, but so far only 58 percent of the land has been acquired.
Another project in the Sing-Viet urban zone in Binh Chanh District remains bogged down for 10 years for the same reason.
Golf courses sell apartments
All the golf courses are set to come up at prime locations which they will share with luxury apartments.
A golf course in an area seems to add a premium to the value of nearby apartments. Dragon City and Phu Hoang Anh apartment blocks used to cost US$1,000 per square meter, but increased to $2,000 after it came to be known a golf course will be built there.
Duong Thanh, general secretary of the HCMC Golf Association, said because of its beautiful landscape, a golf course gives a boost to real estate in its vicinity.
A golf course is itself inherently profitable: while the course breaks even from membership and user fees, health clubs, swimming pools, and restaurant in its premises fetch profits.
The head of Hoa-Viet joint venture Company, owner of the 300-hectare Thu Duc golf course, said 59 villas near the course, rented out at $2,000-4,000 per month, are almost full all year round, most of them rented by foreigners.
Many investors plan to develop housing near the courses, housing that is likely to fetch premium prices.
Vuon Dua golf course in District 9 has earmarked 15.2 percent of its 103 ha site for construction of villas at a cost of VND744 billion ($44.8 million).
Golf course investors also plan to build restaurants, hotels, training centers, international schools, and dog and horse racecourses.
To provide lands for building golf courses, many residents have been uprooted.
Around 500 houses were cleared to build a 27-hole golf course, 100 villas, and a 100-room resort at Hiep Binh Phuoc Ward in Thu Duc District. Hiep Binh Phuoc used to be well-known for growing apricots and supplying apricot flowers for lunar new year.
Most residents there earned their living from growing apricot, but now have to do new jobs after moving out to new places.
More land in the city has been earmarked for golf courses than for parks though the former is meant mainly for the affluent. HCMC has 659 ha of parks while just the six approved courses require 1,262 ha.