$2.56 billion International University Urban Area ready for construction
$2.56 billion International University Urban Area ready for construction
Following nearly 15 years of stagnation, Berjaya Vietnam International University Town LLC plans to start the construction of its International University Urban Area project in the Hoc Mon district of Ho Chi Minh City in the first quarter of 2024.
It is expected that by December 2023, the project will have completed the legal procedures ready to begin compensation and site clearance. Construction will be started in the first quarter of 2024 and finished in December 2027.
Located in the northwest of Ho Chi Minh City, this project is a priority development along with new urban areas such as Thu Thiem, South Saigon, Hiep Phuoc Port, and the science and technology zone in Thu Duc city.
The initial investor was Malaysia Berjaya Leisure, which was granted the first investment certificate in July 2008 to cover 880 hectares and a total investment of $3.5 billion. The project immediately stagnated for 10 years due to weak finances.
Work resumed in 2018 when Berjaya Group decided to transfer 97.9 per cent of the stake in Berjaya Vietnam International University Town LLC to Vinhomes – the real estate development arm of Vingroup – at a total value of $510 million.
Despite the switch, the new investor decided to keep the name of Berjaya for this project. The entire project was set to include schools from primary to university levels, residential areas, a commercial zone, entertainment facilities, medical and sports areas, and an IT park.
In 2016, Ho Chi Minh City People’s Committee assigned local authorities to clarify whether it was feasible to continue or if the investment certificate should be revoked. The investor provided documents proving its financial capacity to implement the project, and at the same time submitted an application for the adjustment of the project schedule.
At the end of 2021, the funding was further adjusted. At the time, the government agreed on a total capital of $2.56 billion and a project lifespan of 50 years from the date of issuance of the adjusted investment certificate.
Berjaya is a large group in Malaysia, however, its business in Vietnam is not comparable. In 2018, it also transferred a third of its stakes in another large-scale project – the Vietnam Financial Centre – to Vinhomes, which was valued at $39 million.
Hoc Mon district is emerging as a new destination for real estate development as the surrounding infrastructure is improved.
According to Ho Chi Minh City Trade and Investment Promotion Centre, it is expected that there will be 55 projects with a total investment of nearly $12.5 billion in Cu Chi and Hoc Mon districts on the outskirts of Ho Chi Minh City in the next 10 years. They will focus on improving the transport infrastructure, adding urban developments, and evolving agriculture services and cultural centres.
In addition, a proposal to establish a northwest city by upgrading Cu Chi, Hoc Mon, Binh Chanh, Nha Be, and Can Gio into urban districts area after 2025 will continue to promote the real estate market in this area.
