100-storey hotel plot remains ground zero
100-storey hotel plot remains ground zero
Kinh Bac Corporation’s $1 billion Diamond Rice Flower complex remains a dream as the land plot still lies empty years after receiving a licence.
According to Kinh Bac’s report for second quarter this year, the company had poured VND119 billion ($5.6 million) investment into the site, the result unchanged since 2012.
Located right next to the National Convention Centre, the site is considered one of the most lucrative land plots in new business district of Hanoi.
Ten years ago, the area was mainly known for The Manor residential development, the National Convention Centre and the Big C supermarket.
There was a race between Japanese and Korean investors to win a license for the land plot.
Finally, a consortium comprised of the Japanese Riviera Corporation and CSK Finance won the site for a five-star hotel development.
In order to secure the site, Japanese developers had to make a non-refundable deposit of $5.5 million with the city.
The loser in the race for the site was Korean developers Keangnam Enterprise. As a consolation they received the site of their current 72-storey Keangnam Landmark Tower.
Meanwhile the Japanese after gaining the licence announced that they were not able to continue with the project only a year later and returned the site to the Hanoi People’s Committee.
The withdrawal of Japanese developers opened up new competition among local developers.
The winning bid would have to cover the Japanese firm’s deposit and provide $25 million to the city [equivalent to 10 per cent of the minimum investment capital], as proof of financial capacity. The new developer was also required to submit 100 per cent of the land leasing fee in one payment.
Kinh Bac Corporation secured the land in 2010 and received the dossiers from Japanese developers. Kinh Bac hired famous London-based international architectural firm Foster and Partners to design the complex, and Diamond Rice Flower Hotel was born. The new complex would consist of a 100-storey building, an 80 storey building and another 15 storey building. However there has been no movement since Kinh Bac took over the site.
CBRE’s most recent reports have also added to gloom. The leading commercial property and real estate services adviser reports that due to massive over-supply of office property, 23 per cent of Grade A and 34 per cent of Grade B buildings remain vacant.
CBRE expects that projects in the west of Hanoi, where the site is located will continue to be burdened by oversupply and price reductions and the area now is home to many large scale projects such as the Grand Plaza, Crowne Plaza, JW Marriott and Keangnam, which offer stiff competition to any new development.
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