HCM City to auction thousands of apartments in Thu Thiem New Urban Area

The HCM City People’s Committee has instructed the Department of Natural Resources and Environment to complete procedures required to auction 3,790 resettlement apartments in the Thu Thiem New Urban Area in Binh Khanh Ward, Thu Duc City.

 

They are part of 12,500 completed in 2015 on an area of 38.4ha in the centre of the old District 2, with convenient transportation to central districts.

There were attempts to auction them in 2017 with a reserve price of VND8.8 trillion (US$384.66 million) and in 2018 at VND 9.1 trillion ($397.46 million), but there were no buyers.

The department now proposes to divide them into two auction packages, one with 1,570 apartments in 11 blocks, the other with 2,220 in 14 apartment blocks.

The department has sought the city property valuation council’s approval of the reserve price for publishing on its website and for the City Land Fund Development Centre to invite eligible bidders.

The prices are expected to be higher than the previous ones.

Winners of the bids can convert the apartments into commercial housing for sale, but must get approval from the People's Committee if they want to start new projects on the land.

The HCM City Real Estate Association has told its member businesses to attend the auction.

The apartments are in a prime location, and winning the bid would enhance the prestige of their brands, it said.

However, companies with experience in developing housing projects said attracting interest in the auction is not easy despite the prime location because of the likely starting price of more than VND10 trillion (nearly $437 million).

The previous auctions failed for similar reasons: bidders had to deposit 20 per cent of the reserve price, and the winner had to pay 50 per cent within a month and the rest within 90 days, not sums most companies could raise within that short time frame.

Dr Su Ngoc Khuong, senior director, Savills Vietnam, said it would be convenient for bidders if the city divides the bidding packages into smaller ones, each with a few hundred apartments.

Besides, it could hold several auctions to gradually increase the reserve price, like commercial housing developers do, he said.

Le Hoang Chau, chairman of HoREA, said if the auction is not successful this time, the city should consider reducing the price by 10 per cent and create smaller bidding packages.

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