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1© CBRE Ltd. 2015

THE PUDONGOF SAIGON

THU THIEM

CBRE Global Research

2 HCMC | Thu Thiem - The Pudong of Saigon

Over the past 300 years HCMC has grown from a small riverbank settlement

into a bustling cityof over eight million inhabitants.

The development of Thu Thiem is now taking shape to create a new financial

and economic centre for the city.

THU THIEM

3© CBRE Ltd. 2015

Over the past 300 years HCMC has grown from a small riverbank settlement

into a bustling cityof over eight million inhabitants.

The development of Thu Thiem is now taking shape to create a new financial

and economic centre for the city.

THU THIEM


0506

09

20

24

263234

Located across the Saigon River from District 1 and possessing a huge land bank of 657 hectares, Thu Thiem is to be redeveloped as a new centre of HCMC.

Planning for the Thu Thiem New Urban Area began as early as 1996. However, to date only a tunnel and a bridge have been completed to connect Thu Thiem to the rest of the city. Four other bridges and a metro link are still either under-construction or under planning.

More than 99% of land in the district has already been cleared with a total compensation cost of about US$800 million.

By the end of 2014, 2,460 of a total of 123,500 resettlement apartments had been completed and handed over.

In July 2015, the first residential project was launched in Thu Thiem by local group Dai Quang Minh at a selling price of US$2,000 to 2,800 per sq. m., marking a new milestone in the development of the area.

A number of challenges remain for investors, including the lack of properly developed infrastructure and high land prices.

Executive Summary

Introduction

About Thu Thiem Location Land Information

Why Thu Thiem? Land-Use Plan Building Height Plan Land Allocation

Infrastructure

Pudong Case Study

Lessons Learntfrom Pudong

Conclusion and References

Major Approved Projects

22 High-end CondominiumPrice Comparison

EXECUTIVE SUMARYCONTENTS

What is holding backThu Thiem?

Opportunities Challenges

CBRE GLOBAL RESEARCHThis report was prepared by CBRE Vietnam Research Team, which forms part of CBRE Global Research—a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate.

© CBRE Ltd. 2015 Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

5© CBRE Ltd. 2015

0506

09

20

24

263234

Located across the Saigon River from District 1 and possessing a huge land bank of 657 hectares, Thu Thiem is to be redeveloped as a new centre of HCMC.

Planning for the Thu Thiem New Urban Area began as early as 1996. However, to date only a tunnel and a bridge have been completed to connect Thu Thiem to the rest of the city. Four other bridges and a metro link are still either under-construction or under planning.

More than 99% of land in the district has already been cleared with a total compensation cost of about US$800 million.

By the end of 2014, 2,460 of a total of 123,500 resettlement apartments had been completed and handed over.

In July 2015, the first residential project was launched in Thu Thiem by local group Dai Quang Minh at a selling price of US$2,000 to 2,800 per sq. m., marking a new milestone in the development of the area.

A number of challenges remain for investors, including the lack of properly developed infrastructure and high land prices.

Executive Summary

Introduction

About Thu Thiem Location Land Information

Why Thu Thiem? Land-Use Plan Building Height Plan Land Allocation

Infrastructure

Pudong Case Study

Lessons Learntfrom Pudong

Conclusion and References

Major Approved Projects

22 High-end CondominiumPrice Comparison

EXECUTIVE SUMARYCONTENTS

What is holding backThu Thiem?

Opportunities Challenges

CBRE GLOBAL RESEARCHThis report was prepared by CBRE Vietnam Research Team, which forms part of CBRE Global Research—a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate.

© CBRE Ltd. 2015 Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE.

hu Thiem is a 657 hectare site located in District 2, on the opposite side of the Saigon River from District 1 and the

Central Business District. Even though it is relatively close to the centre of HCMC, Thu Thiem is largely a Greenfield site and until recently has had little connection with the rest of the city.

Thu Thiem was identified by the Vietnamese government as a key potential development area for a new Central Business District in 1996. The plan envisages a sustainable, mixed-use project that incorporates commercial and residential areas in addition to schools, offices and open public spaces.

US architecture firm Sasaki Associates was commissioned in 2003 to produce a plan for the

transformation of Thu Thiem into an international financial and commercial centre. When development is complete, Thu Thiem will have a resident population of 150,000 and a daily working population of 220,000. Links to other parts of HCMC will include a tunnel (now completed), four road bridges (one already completed), a pedestrian bridge, a metro link and HCMC’s existing waterway network.

The first bridge linking Thu Thiem to Binh Thanh District opened to traffic in 2008, but it was not until the opening of the Thu Thiem tunnel in 2011 that Thu Thiem truly became accessible from existing parts of the HCMC downtown area.

Work on internal roads within the Thu Thiem area began in 2014. When complete, these will include a

lakeside road, a riverside road and a 12 km long flyover. Work is scheduled to finish within the next 36 months.

In July 2015, local developer Dai Quang Minh launched the first residential project in Thu Thiem at prices ranging from US$2,000 to US$2.800 per sq. m., marking a new milestone in the development of Thu Thiem.

The most visible new structure in Thu Thiem will be the part of the 14.5 hectare Empire City Project which was recently approved. The project will be developed by a joint venture between Tien Phuoc JSC., Tran Thai Co. Ltd., Denver Power Ltd (UK) and GAW Capital Partners. It will be located directly opposite the existing HCMC downtown area

and will feature an 86 storey structure, one of the tallest in South East Asia, in addition to a high-end shopping mall, a 5-star hotel, offices, serviced apartments and underground parking.

As HCMC continues to expand, the development of Thu Thiem will offer significant opportunities in construction and real estate and as a location for business growth. However, the pace of development to date has not met expectations, mainly due to infrastructure and high land prices.

This report examines the opportunities that Thu Thiem will offer as well as the challenges that it must overcome in order to establish itself as the new centre of HCMC.

657-145,500 -

INTRODUCTION

T

HCMC is set to continue to expand at a rapid rate and the development of Thu Thiem will offer foreign investors myriad opportunities.

permanentresidents

hectares


hu Thiem is a 657 hectare site located in District 2, on the opposite side of the Saigon River from District 1 and the

Central Business District. Even though it is relatively close to the centre of HCMC, Thu Thiem is largely a Greenfield site and until recently has had little connection with the rest of the city.

Thu Thiem was identified by the Vietnamese government as a key potential development area for a new Central Business District in 1996. The plan envisages a sustainable, mixed-use project that incorporates commercial and residential areas in addition to schools, offices and open public spaces.

US architecture firm Sasaki Associates was commissioned in 2003 to produce a plan for the

transformation of Thu Thiem into an international financial and commercial centre. When development is complete, Thu Thiem will have a resident population of 150,000 and a daily working population of 220,000. Links to other parts of HCMC will include a tunnel (now completed), four road bridges (one already completed), a pedestrian bridge, a metro link and HCMC’s existing waterway network.

The first bridge linking Thu Thiem to Binh Thanh District opened to traffic in 2008, but it was not until the opening of the Thu Thiem tunnel in 2011 that Thu Thiem truly became accessible from existing parts of the HCMC downtown area.

Work on internal roads within the Thu Thiem area began in 2014. When complete, these will include a

lakeside road, a riverside road and a 12 km long flyover. Work is scheduled to finish within the next 36 months.

In July 2015, local developer Dai Quang Minh launched the first residential project in Thu Thiem at prices ranging from US$2,000 to US$2.800 per sq. m., marking a new milestone in the development of Thu Thiem.

The most visible new structure in Thu Thiem will be the part of the 14.5 hectare Empire City Project which was recently approved. The project will be developed by a joint venture between Tien Phuoc JSC., Tran Thai Co. Ltd., Denver Power Ltd (UK) and GAW Capital Partners. It will be located directly opposite the existing HCMC downtown area

and will feature an 86 storey structure, one of the tallest in South East Asia, in addition to a high-end shopping mall, a 5-star hotel, offices, serviced apartments and underground parking.

As HCMC continues to expand, the development of Thu Thiem will offer significant opportunities in construction and real estate and as a location for business growth. However, the pace of development to date has not met expectations, mainly due to infrastructure and high land prices.

This report examines the opportunities that Thu Thiem will offer as well as the challenges that it must overcome in order to establish itself as the new centre of HCMC.

657-145,500 -

INTRODUCTION

T

HCMC is set to continue to expand at a rapid rate and the development of Thu Thiem will offer foreign investors myriad opportunities.

permanentresidents

hectares

7© CBRE Ltd. 2015

ABOUTTHU THIEMLocation

Land Information

Why Thu Thiem?

Land-Use Plan

Building Height Plan

Land Allocation

Infrastructure


ABOUTTHU THIEMLocation

Land Information

Why Thu Thiem?

Land-Use Plan

Building Height Plan

Land Allocation

Infrastructure

9© CBRE Ltd. 2015

THUTHIEM

DISTRICT 12

THU DUC DISTRICT

GO VAP DISTRICT

BINH THANHDISTRICTTAN BINH

DISTRICT

TAN SON NHATINTERNATIONALAIRPORT

DISTRICT 9

DISTRICT3

DISTRICT 11

DISTRICT 8

Nguyen

Van Linh

East-West

Highway

Vo Van Kiet

Nguyen H

uu Tho

Village Road 19

Nguyen Duy Trinh

HCMC - Trung Luong Expressway

DISTRICT 4

DISTRICT1

DISTRICT7

DISTRICT 10DISTRICT 2

DISTRICT 6

1A

10

1A

1A

13

National Highway

HO CHI MINH CITY

0 1 2 5 10 km

LOCATIONThu Thiem is situated in District 2 across the Saigon River from District 1.

District Boundary

HCMC | Thu Thiem - The Pudong of Saigon

THUTHIEM

DISTRICT 12

THU DUC DISTRICT

GO VAP DISTRICT

BINH THANHDISTRICTTAN BINH

DISTRICT

TAN SON NHATINTERNATIONALAIRPORT

DISTRICT 9

DISTRICT3

DISTRICT 11

DISTRICT 8

Nguyen

Van Linh

East-West

Highway

Vo Van Kiet

Nguyen H

uu Tho

Village Road 19

Nguyen Duy Trinh

HCMC - Trung Luong Expressway

DISTRICT 4

DISTRICT1

DISTRICT7

DISTRICT 10DISTRICT 2

DISTRICT 6

1A

10

1A

1A

13

National Highway

HO CHI MINH CITY

0 1 2 5 10 km

LOCATIONThu Thiem is situated in District 2 across the Saigon River from District 1.

District Boundary

© CBRE Ltd. 2015

WHY THU THIEM?LAND INFORMATION

hu Thiem enjoys a strategic location across the Saigon River from District 1 and possesses a large land bank. It is these attributes that prompted city master planners to identify the area as an ideal location for the development

of a new financial, commercial and residential centre for HCMC.

Thu Thiem also acts as a link between existing areas of the city and new developments to the east, including the city’s planned new international airport. The area is ideally located at the southern terminus of National Highway No. 1, the main road transport link which runs from Hanoi in the North to HCMC in the South.

Similar to Pudong’s location in Shanghai, Thu Thiem occupies a large peninsula formed by a meander in the Saigon river. This area on the East side of the river includes almost 8.5 km of river frontage which is mainly used for commercial and transportation activity. The river is heavily polluted in places and the river frontage currently houses a number of unsightly industrial facilities and storage areas. As Thu Thiem is developed, this area will be transformed into an important residential, working and recreational amenity for the city.

The Saigon river is a tidal river characterised by diurnal tides. Thu Thiem is fully integrated into the hydrological cycle of the river, acting locally both as a water filter and a receiving area for river water. While it is accepted that current levels of pollution in the Saigon River must be addressed at a regional level, it is believed that the development of Thu Thiem will help create a new perception of the centre of HCMC as an attractive, riverfront area. This will help to reinforce the image of HCMC as a desirable world-class metropolis.

The Pudong model that Thu Thiem attempting to follow has enjoyed remarkable success over the past decades, which is encouraging HCMC authorities to accelerate their plans to develop the area.

Sour

ce: w

ww

.thut

hiem

.hoc

him

inhc

ity.

gov.v

n

3,823,055

2,220,079 sq. m.

sq. m. sq. m.

7,563,750 sq. m.

TOTAL GFA(UPPER GROUND)

TOTAL GFA(UNDERGROUND)

TOTALLANDAREA

TOTALUSABLELANDAREA

216 ha657 ha

Residential Space

3,339,285Commercial Space Land Efficiency Ratio

3.5

Number of Apartment

units26,618

Height Restriction

storeys86

sq. m.2,500-3,500

Land Price - Approx. US$

ThuThiem

The development of Thu Thiem offers an opportunity to connect the eastern bank of the river with the rest of the city.

T


WHY THU THIEM?LAND INFORMATION

hu Thiem enjoys a strategic location across the Saigon River from District 1 and possesses a large land bank. It is these attributes that prompted city master planners to identify the area as an ideal location for the development

of a new financial, commercial and residential centre for HCMC.

Thu Thiem also acts as a link between existing areas of the city and new developments to the east, including the city’s planned new international airport. The area is ideally located at the southern terminus of National Highway No. 1, the main road transport link which runs from Hanoi in the North to HCMC in the South.

Similar to Pudong’s location in Shanghai, Thu Thiem occupies a large peninsula formed by a meander in the Saigon river. This area on the East side of the river includes almost 8.5 km of river frontage which is mainly used for commercial and transportation activity. The river is heavily polluted in places and the river frontage currently houses a number of unsightly industrial facilities and storage areas. As Thu Thiem is developed, this area will be transformed into an important residential, working and recreational amenity for the city.

The Saigon river is a tidal river characterised by diurnal tides. Thu Thiem is fully integrated into the hydrological cycle of the river, acting locally both as a water filter and a receiving area for river water. While it is accepted that current levels of pollution in the Saigon River must be addressed at a regional level, it is believed that the development of Thu Thiem will help create a new perception of the centre of HCMC as an attractive, riverfront area. This will help to reinforce the image of HCMC as a desirable world-class metropolis.

The Pudong model that Thu Thiem attempting to follow has enjoyed remarkable success over the past decades, which is encouraging HCMC authorities to accelerate their plans to develop the area.

Sour

ce: w

ww

.thut

hiem

.hoc

him

inhc

ity.

gov.v

n

3,823,055

2,220,079 sq. m.

sq. m. sq. m.

7,563,750 sq. m.

TOTAL GFA(UPPER GROUND)

TOTAL GFA(UNDERGROUND)

TOTALLANDAREA

TOTALUSABLELANDAREA

216 ha657 ha

Residential Space

3,339,285Commercial Space Land Efficiency Ratio

3.5

Number of Apartment

units26,618

Height Restriction

storeys86

sq. m.2,500-3,500

Land Price - Approx. US$

ThuThiem

The development of Thu Thiem offers an opportunity to connect the eastern bank of the river with the rest of the city.

T

13© CBRE Ltd. 2015

LAND-USE PLANResidential – High-density

Cultural Sites

School

Thu Thiem NUA’s Border

Central Square’s Border

Commercial

Commercial Mixed-use

Residential Mixed-use

Residential – High-density

Software Park

Administration Sites

Medical Centre

Urban Service Sites

Central Park

Entertainment/Education

Paludology

Central Square

Waterway

0 100 200 400 m0 100 200 400 m

Source: Urban Design Guideline by Sasaki Associates (USA)

Project Site Boundary

25 Floors (100 m)

30 Floors (120 m)

40 Floors (160 m)

50 Floors (200 m)

86 Floors (344 m)

4 Floors (16 m)

6 Floors (24 m)

10 Floors (40 m)

15 Floors (60 m)

20 Floors (80 m)

BUILDING HEIGHT PLAN



LAND-USE PLANResidential – High-density

Cultural Sites

School

Thu Thiem NUA’s Border

Central Square’s Border

Commercial

Commercial Mixed-use

Residential Mixed-use

Residential – High-density

Software Park

Administration Sites

Medical Centre

Urban Service Sites

Central Park

Entertainment/Education

Paludology

Central Square

Waterway

0 100 200 400 m0 100 200 400 m


Project Site Boundary

25 Floors (100 m)

30 Floors (120 m)

40 Floors (160 m)

50 Floors (200 m)

86 Floors (344 m)

4 Floors (16 m)

6 Floors (24 m)

10 Floors (40 m)

15 Floors (60 m)

20 Floors (80 m)

BUILDING HEIGHT PLAN


15© CBRE Ltd. 2015

1

8

3 4

56

2a

2b2c

7

lots 1 and 2 in Thu Thiem face the existing city centre (District 1 of HCMC) and have therefore been identified as the core of the new urban area. These two plots will be developed as the financial and commercial heart of Thu Thiem and will comprise high-density office towers, commercial developments and public spaces such as the Central Plaza and the Crescent

Riverfront Park. The main focal point of this area will be the tallest building in HCMC which will serve as an iconic feature of the city’s skyline. There will also be a large square in the centre of this core area containing indoor and outdoor arenas and recreation spaces.

In June 2015, a consortium of two local firms Tien Phuoc Real Estate JSC and Tran Thai Real Estate Co. Ltd. and Denver Power Co. Ltd., a member of UK-based Gaw Capital Partners received an investment certificate to develop Plot 2b worth US$1.2 billion. The 15-ha area, known as the Empire City Complex, will consist of an 86-storey building, a five-star hotel, a shopping mall and an office building.

In 2014 South Korean conglomerate Lotte and its Japanese partners (Mitsubishi and Toshiba) received in-principal approval to develop Plot 2a worth US$2 billion. The Eco Smart City development is expected to feature luxury trade centres, hotels, office buildings, and apartments on across an area of 10 hectares.

The second main area of Thu Thiem will be the East/West Boulevard consisting of Plots 5 and 6. This area provides a gateway to Thu Thiem from both District 1 and District 2 and will be home to stations on the metro line that will run from District 1 to Thu Thiem. Plots 5 and 6 will be reserved for various types of residential development as well as supporting facilities such as schools, medical centres and parks. Building height in this area will range from three to sixteen storeys.

Under an agreement with Thu Thiem Authority, the whole land area of these two plots is to be given to Dai Quang Minh Real Estate Investment JSC, a local company, in exchange for it investing in infrastructure systems in Thu Thiem including building four major roads, the Thu Thiem 2 Bridge and a pedestrian bridge.(1)

The company plans to develop an 80-hectare residential area near the southern section of the Mai Chi Tho Road (the existing main road that runs from Thu Thiem Tunnel through the site to District 2), and a 20-hectare area with 11 plots of land near the northern section of the road. According to the plan, the company will also build another urban area near a 150-hectare southern ecological forest area on the peninsula, including 234 villas, 395 houses, 5,600 luxury apartments, a five-star hotel and a hospital. (2) In early Q3 2015, the first 414 Sarimi apartments and 178 Saroma villas of Sala Thu Thiem are under-construction and have been launched for sale. The developer is also planning to launch the next condominium blocks named Sarica and Sadora. This is also the only project that is currently under-construction in Thu Thiem.

LAND ALLOCATION

(1) See Infrastructure Map page 20-21(2) Source: http://vietnamnews.vn/economy/263477/hcm-city-signs-bt-infrastructure-deal.html

The Northern residential area consists of neighbourhoods #3 and #4

The residential areas along the Mai Chi Tho Boulevard are shown as #5 and #6 respectively

Neighbourhood #7 includes the Eastern Residential development, Urban Resort Hotel and Marina

Neighbourhood #8 encompasses the entire Southern Delta area

The “Core Area” of Thu Thiem is divided into two neighbourhoods known as #1 and #2 (2a, 2b, 2c)

P


1

8

3 4

56

2a

2b2c

7

lots 1 and 2 in Thu Thiem face the existing city centre (District 1 of HCMC) and have therefore been identified as the core of the new urban area. These two plots will be developed as the financial and commercial heart of Thu Thiem and will comprise high-density office towers, commercial developments and public spaces such as the Central Plaza and the Crescent

Riverfront Park. The main focal point of this area will be the tallest building in HCMC which will serve as an iconic feature of the city’s skyline. There will also be a large square in the centre of this core area containing indoor and outdoor arenas and recreation spaces.

In June 2015, a consortium of two local firms Tien Phuoc Real Estate JSC and Tran Thai Real Estate Co. Ltd. and Denver Power Co. Ltd., a member of UK-based Gaw Capital Partners received an investment certificate to develop Plot 2b worth US$1.2 billion. The 15-ha area, known as the Empire City Complex, will consist of an 86-storey building, a five-star hotel, a shopping mall and an office building.

In 2014 South Korean conglomerate Lotte and its Japanese partners (Mitsubishi and Toshiba) received in-principal approval to develop Plot 2a worth US$2 billion. The Eco Smart City development is expected to feature luxury trade centres, hotels, office buildings, and apartments on across an area of 10 hectares.

The second main area of Thu Thiem will be the East/West Boulevard consisting of Plots 5 and 6. This area provides a gateway to Thu Thiem from both District 1 and District 2 and will be home to stations on the metro line that will run from District 1 to Thu Thiem. Plots 5 and 6 will be reserved for various types of residential development as well as supporting facilities such as schools, medical centres and parks. Building height in this area will range from three to sixteen storeys.

Under an agreement with Thu Thiem Authority, the whole land area of these two plots is to be given to Dai Quang Minh Real Estate Investment JSC, a local company, in exchange for it investing in infrastructure systems in Thu Thiem including building four major roads, the Thu Thiem 2 Bridge and a pedestrian bridge.(1)

The company plans to develop an 80-hectare residential area near the southern section of the Mai Chi Tho Road (the existing main road that runs from Thu Thiem Tunnel through the site to District 2), and a 20-hectare area with 11 plots of land near the northern section of the road. According to the plan, the company will also build another urban area near a 150-hectare southern ecological forest area on the peninsula, including 234 villas, 395 houses, 5,600 luxury apartments, a five-star hotel and a hospital. (2) In early Q3 2015, the first 414 Sarimi apartments and 178 Saroma villas of Sala Thu Thiem are under-construction and have been launched for sale. The developer is also planning to launch the next condominium blocks named Sarica and Sadora. This is also the only project that is currently under-construction in Thu Thiem.

LAND ALLOCATION

(1) See Infrastructure Map page 20-21(2) Source: http://vietnamnews.vn/economy/263477/hcm-city-signs-bt-infrastructure-deal.html

The Northern residential area consists of neighbourhoods #3 and #4

The residential areas along the Mai Chi Tho Boulevard are shown as #5 and #6 respectively

Neighbourhood #7 includes the Eastern Residential development, Urban Resort Hotel and Marina

Neighbourhood #8 encompasses the entire Southern Delta area

The “Core Area” of Thu Thiem is divided into two neighbourhoods known as #1 and #2 (2a, 2b, 2c)

P

17© CBRE Ltd. 2015

INFRASTRUCTURE

THU THIEM’S DEVELOPMENT TIMELINE

Thu Thiem 1Bridge opened

Thu Thiem Tunnelopened

Relocation of existingresidents officially begins

Planning forThu Thiem begins

1/2000 master plan by architecture firm Sasaki Associates unveiled

Work on Thu Thiem 2 Bridge begins

Launch of the first residential project in Thu Thiem by Dai Quang Minh

20081996 20112002 2012 2/2015 7/2015

THU THIEM 1 BRIDGELinking Thu Thiem with Binh Thanh Dist.AuthorityOpened in 2008

THU THIEM 2 BRIDGELinking Thu Thiem with District 1 (at one end of Ton Duc Thang Str.)Investor: Dai Quang MinhUnder-construction, set to open in 2018

PEDESTRIAN BRIDGELinking Thu Thiem with District 1 (at Me Linh Square)Investor: Dai Quang MinhUnder Design and Concept Contest

THU THIEM TUNNEL Linking Thu Thiem with District 1Investor: Thu Thiem AuthorityOpened in 2011

THU THIEM 3 BRIDGELinking Thu Thiem with District 4Under-planning


FOUR MAJOR ROADSTotal length: 11.9kmInvestor: Dai Quang Minh and Vietnam Infrastructure Development and Finance Investment JSC. (VIDIFI) Construction started in 2014, to be completed in 2017

East-West HighwayConnects Thu Thiem to residential and commercial districts to the east

Source: http://www.thuthiem.hochiminhcity.gov.vn


INFRASTRUCTURE

THU THIEM’S DEVELOPMENT TIMELINE

Thu Thiem 1Bridge opened

Thu Thiem Tunnelopened

Relocation of existingresidents officially begins

Planning forThu Thiem begins

1/2000 master plan by architecture firm Sasaki Associates unveiled

Work on Thu Thiem 2 Bridge begins

Launch of the first residential project in Thu Thiem by Dai Quang Minh

20081996 20112002 2012 2/2015 7/2015

THU THIEM 1 BRIDGELinking Thu Thiem with Binh Thanh Dist.AuthorityOpened in 2008

THU THIEM 2 BRIDGELinking Thu Thiem with District 1 (at one end of Ton Duc Thang Str.)Investor: Dai Quang MinhUnder-construction, set to open in 2018

PEDESTRIAN BRIDGELinking Thu Thiem with District 1 (at Me Linh Square)Investor: Dai Quang MinhUnder Design and Concept Contest

THU THIEM TUNNEL Linking Thu Thiem with District 1Investor: Thu Thiem AuthorityOpened in 2011



FOUR MAJOR ROADSTotal length: 11.9kmInvestor: Dai Quang Minh and Vietnam Infrastructure Development and Finance Investment JSC. (VIDIFI) Construction started in 2014, to be completed in 2017

East-West HighwayConnects Thu Thiem to residential and commercial districts to the east

Source: http://www.thuthiem.hochiminhcity.gov.vn

19© CBRE Ltd. 2015

MAJOR APPROVED PROJECTS

Eco-forest ParkStatus: In-principal approvalDeveloper: Dai Quang Minh

Parcel Area: 17.9 haGross floor area (GFA): 60,000 m2Floor area ratio (FAR): 0.34Height: 4 stories Commercial ratio: 100%

Plot 8

Marina Complex (Parcel 7-2)Status: Sult Marina Development Pte Ltd.

(Singapore) and Sai Gon Yacht Corp have registered for development but no

activity yet

Total area: 5.4 haGross floor area (GFA): 5.000 sq. m.

Floor area ratio (FAR): 0.14Height: 6 stories

Commercial ratio: 100%

Plot 7

Mixed-use Status: In-principal approval, residential component construction started in 2013,

launched in Jul 2015Developer: Dai Quang Minh

Area: ~100 haGFA: 730,000 sq.m.

Total investment cost: US$2.2 billion

Plot 5 + 6

1

8

3 4

5

7

2a

2b2c

Mixed-use Status: In-principal approval in 2014Developer: Lotte, Mitsubishi, Toshiba

Area: 10 ha | GFA: 730,000 sq. m.Total investment cost: US$2.2 billion

Plot 2a: Thu Thiem EcoSmart City

Mixed-use including 86-storey landmark building Status: In-principal approved, construction to start at the end of 2015Developer: JV Tien Phuoc – Tran Thai – Gaw Capital Partner

Area: 14.5 ha| GFA: 730,000 sq. m.Total investment cost: US$1.2 billion

Plot 2b: Empire City Project

Section 1-3 and 3-5: Trung Thuy Group got approval to study development and design plan for a 1,16 ha siteSection 1-15 and 3-3, 3-7, 3-1: GS E&C got approval to carry out investment plan for a 4 ha site

Plot 1 + 3

6


MAJOR APPROVED PROJECTS

Eco-forest ParkStatus: In-principal approvalDeveloper: Dai Quang Minh

Parcel Area: 17.9 haGross floor area (GFA): 60,000 m2Floor area ratio (FAR): 0.34Height: 4 stories Commercial ratio: 100%

Plot 8

Marina Complex (Parcel 7-2)Status: Sult Marina Development Pte Ltd.

(Singapore) and Sai Gon Yacht Corp have registered for development but no

activity yet

Total area: 5.4 haGross floor area (GFA): 5.000 sq. m.

Floor area ratio (FAR): 0.14Height: 6 stories

Commercial ratio: 100%

Plot 7

Mixed-use Status: In-principal approval, residential component construction started in 2013,

launched in Jul 2015Developer: Dai Quang Minh

Area: ~100 haGFA: 730,000 sq.m.

Total investment cost: US$2.2 billion

Plot 5 + 6

1

8

3 4

5

7

2a

2b2c

Mixed-use Status: In-principal approval in 2014Developer: Lotte, Mitsubishi, Toshiba

Area: 10 ha | GFA: 730,000 sq. m.Total investment cost: US$2.2 billion

Plot 2a: Thu Thiem EcoSmart City

Mixed-use including 86-storey landmark building Status: In-principal approved, construction to start at the end of 2015Developer: JV Tien Phuoc – Tran Thai – Gaw Capital Partner

Area: 14.5 ha| GFA: 730,000 sq. m.Total investment cost: US$1.2 billion

Plot 2b: Empire City Project

Section 1-3 and 3-5: Trung Thuy Group got approval to study development and design plan for a 1,16 ha siteSection 1-15 and 3-3, 3-7, 3-1: GS E&C got approval to carry out investment plan for a 4 ha site

Plot 1 + 3

6

21© CBRE Ltd. 2015

BEN THANH

OPERA HOUSE

BA SON

VAN THANH

NEW PORT

AN PHU

THAO DIEN

RACH CHIEC

PHUOC LONG

District10

Phu NhuanDistrict

Binh ThanhDistrict

Go VapDistrict

District 2District 3

District 1

District 4

Scale 2km

THE SUN AVENUELaunched price: US$1,480 (basic finishes)Q3/15 price: US$1,650Unit size: 67 - 87 sq. m.Total units: 3,000

MASTERI THAO DIENQ4/14 launched price: US$1,520 (basic finishes)Q3/15 price: US$1,770Unit size: 45 - 87 sq. m.Total units: 3,025

Xi RIVERVIEW PALACE

Q4/08 launch price: US$2,150 (full furnishes)Q3/15 price: US$2,350 - $2,650Unit size: 138 - 195sqmTotal units: 270

GATEWAY THAO DIENQ2/15 launched price: US$1,800 (full finishes)Q3/15 price: US$1,996-2,115Unit size: 45 - 136 sq. m.Total units: 439

VISTA VERDELaunched price: US$1,680 (basic finishes)Q3/15 price: US$1,700Unit size: 45 - 177 sq. m.Total units: 1,152

ESTELLA HEIGHTSLaunched price: US$1,900 (full finishes)Q3/15 price : US$2,130 for 89 sq. m.Unit size: 80 - 135 sq. m.Total units: 824

VINHOMES CENTRAL PARKQ4/14 launched price: US$2,122 (full finishes)Q3/15 price: US$2,200 – $2,510 for Park 1, Park 6 ~US$4,000 for Landmark 81Unit size: 50 – 108 sq. m.Total units: 10,000

RIVERGATE

Q4/14 launched price US$2,660 (bareshell) Q3/15 price : US$2,610Unit size: 56-114 sq. m. Total units: 276

ICON 56

Q1/14 launched price : US$ 2,910 (bareshell) Q3/15 price: US$3,210Unit size: 47-112 sq. m. gross areaTotal units: 328

HIGH-END CONDOMINIUM

PRICE COMPARISON

Handover Conditions Bathroom suites Kitchen cabinet Air-conditioner Wardrobe

Basic finishes Y N N N

Full finishes Y Y Y Y/N

Prices are quoted exclusive of 10% VAT and 2% maintenance fee

THE GOLDVIEW

Q3/15 launched price: US$1,650-2,050 (basic finishes) Unit size: 45-123 sq. m. Total units: 1,846

THE TRESOR

Q4/14 launched price: US$2,900 (bareshell) Q3/15 price: US$2,720Unit size: 57-114 sq. m.Total units: 498

Developed by Dai Quang MinhQ3/15 launched price: US$2,000 - $2,800 (full finishes)Unit size: 82 - 123 sq. m.Total units: 414

SARIMI (SALA THU THIEM)

Thu Thiem

CBD

Source: CBRE Research, Q2 2015.

METRO LINE 1

METRO STATION

MAJOR HIGH-ENDCONDOMINIUM


BEN THANH

OPERA HOUSE

BA SON

VAN THANH

NEW PORT

AN PHU

THAO DIEN

RACH CHIEC

PHUOC LONG

District10

Phu NhuanDistrict

Binh ThanhDistrict

Go VapDistrict

District 2District 3

District 1

District 4

Scale 2km

THE SUN AVENUELaunched price: US$1,480 (basic finishes)Q3/15 price: US$1,650Unit size: 67 - 87 sq. m.Total units: 3,000

MASTERI THAO DIENQ4/14 launched price: US$1,520 (basic finishes)Q3/15 price: US$1,770Unit size: 45 - 87 sq. m.Total units: 3,025

Xi RIVERVIEW PALACE

Q4/08 launch price: US$2,150 (full furnishes)Q3/15 price: US$2,350 - $2,650Unit size: 138 - 195sqmTotal units: 270

GATEWAY THAO DIENQ2/15 launched price: US$1,800 (full finishes)Q3/15 price: US$1,996-2,115Unit size: 45 - 136 sq. m.Total units: 439

VISTA VERDELaunched price: US$1,680 (basic finishes)Q3/15 price: US$1,700Unit size: 45 - 177 sq. m.Total units: 1,152

ESTELLA HEIGHTSLaunched price: US$1,900 (full finishes)Q3/15 price : US$2,130 for 89 sq. m.Unit size: 80 - 135 sq. m.Total units: 824

VINHOMES CENTRAL PARKQ4/14 launched price: US$2,122 (full finishes)Q3/15 price: US$2,200 – $2,510 for Park 1, Park 6 ~US$4,000 for Landmark 81Unit size: 50 – 108 sq. m.Total units: 10,000

RIVERGATE

Q4/14 launched price US$2,660 (bareshell) Q3/15 price : US$2,610Unit size: 56-114 sq. m. Total units: 276

ICON 56

Q1/14 launched price : US$ 2,910 (bareshell) Q3/15 price: US$3,210Unit size: 47-112 sq. m. gross areaTotal units: 328

HIGH-END CONDOMINIUM

PRICE COMPARISON

Handover Conditions Bathroom suites Kitchen cabinet Air-conditioner Wardrobe

Basic finishes Y N N N

Full finishes Y Y Y Y/N

Prices are quoted exclusive of 10% VAT and 2% maintenance fee

THE GOLDVIEW

Q3/15 launched price: US$1,650-2,050 (basic finishes) Unit size: 45-123 sq. m. Total units: 1,846

THE TRESOR

Q4/14 launched price: US$2,900 (bareshell) Q3/15 price: US$2,720Unit size: 57-114 sq. m.Total units: 498

Developed by Dai Quang MinhQ3/15 launched price: US$2,000 - $2,800 (full finishes)Unit size: 82 - 123 sq. m.Total units: 414

SARIMI (SALA THU THIEM)

Thu Thiem

CBD


METRO LINE 1

METRO STATION

MAJOR HIGH-ENDCONDOMINIUM

23© CBRE Ltd. 2015

Management mechanism:The developer of Thu Thiem is a state-owned company (Thu Thiem Investment and Construction Authority) which does not have the absolute authority to make quick decisions on the project’s overall vision, budget and staffing. All decisions have to be approved by the city government, which o�en takes a considerable time.

Policies and incentives to attract investors to Thu Thiem in the next 10-15 years remain very limited.

Lack of synchronous infrastructure. The four main streets of this area are still under construction and will only be completed in the next 1-2 years.

Land prices are high. Investment costs in Thu Thiem new residential area are significant at an average of over US$3,000 per sq. m. In addition, the city does not offer credit for land leasing and requires investors to pay for it immediately.

The major focus of development in Thu Thiem is on office and commercial real estate. However, a sizable volume of commercial supply already exists on the West of the Saigon River on more or less the same scale. Additional development currently underway on the West side of the river (the existing CBD) will make Thu Thiem even more unattractive to investors. The total GFA of newly-approved projects on the West side including Tan Cang, Ba Son and Khanh Hoi is 4.9 million sq. m., marginally less than the 5.1 million sq. m. planned for the core area of Thu Thiem (zone 1, 2, 3 and 4). Assuming net absorption continues at levels recorded in Q2 2015 (an increases 1.4% q-o-q) it will take 12 years to absorb the total supply provided by these three sites on the West side.

For HCMC to expand in all directions, the success of the Thu Thiem New Urban Area project is vital.

WHAT IS HOLDING BACK THU THIEM?

Strategic location

Cleared site provides a very largeland bank

Masterplan in place

Lack of big land bankin the existing CBD

HCMC set to become a global megacity

Slow progress of infrastructure development

High land prices

Current lack of demand for space in HCMC, especially from the financial services sector

Lack of strong command and control

Slow pace of activity to date

Fractured ownership and speculative investment

Limited tax powers and levers

Local, regional and global competition

CHALLENGESOPPORTUNITIES


Management mechanism:The developer of Thu Thiem is a state-owned company (Thu Thiem Investment and Construction Authority) which does not have the absolute authority to make quick decisions on the project’s overall vision, budget and staffing. All decisions have to be approved by the city government, which o�en takes a considerable time.

Policies and incentives to attract investors to Thu Thiem in the next 10-15 years remain very limited.

Lack of synchronous infrastructure. The four main streets of this area are still under construction and will only be completed in the next 1-2 years.

Land prices are high. Investment costs in Thu Thiem new residential area are significant at an average of over US$3,000 per sq. m. In addition, the city does not offer credit for land leasing and requires investors to pay for it immediately.

The major focus of development in Thu Thiem is on office and commercial real estate. However, a sizable volume of commercial supply already exists on the West of the Saigon River on more or less the same scale. Additional development currently underway on the West side of the river (the existing CBD) will make Thu Thiem even more unattractive to investors. The total GFA of newly-approved projects on the West side including Tan Cang, Ba Son and Khanh Hoi is 4.9 million sq. m., marginally less than the 5.1 million sq. m. planned for the core area of Thu Thiem (zone 1, 2, 3 and 4). Assuming net absorption continues at levels recorded in Q2 2015 (an increases 1.4% q-o-q) it will take 12 years to absorb the total supply provided by these three sites on the West side.

For HCMC to expand in all directions, the success of the Thu Thiem New Urban Area project is vital.

WHAT IS HOLDING BACK THU THIEM?

Strategic location

Cleared site provides a very largeland bank

Masterplan in place

Lack of big land bankin the existing CBD

HCMC set to become a global megacity

Slow progress of infrastructure development

High land prices

Current lack of demand for space in HCMC, especially from the financial services sector

Lack of strong command and control

Slow pace of activity to date

Fractured ownership and speculative investment

Limited tax powers and levers

Local, regional and global competition

CHALLENGESOPPORTUNITIES

25© CBRE Ltd. 2015

recently as the early 1990s, the Pudong area of Shanghai was mainly farmland. Commercial development in the area was

limited to a few warehouses and wharfs on the riverfront. In 1990 the Central Committee of the Communist Party of China (CCCPC) and the State Council announced plans to re-devel-op Pudong, a move which ushered in the rapid development of the area.

BACKGROUND

As

CASE STUDY: PUDONG

2013

25 years later, Pudong has become a thriv-ing commercial and financial centre of Shanghai and stands as a symbol of Shang-hai’s modernisation and the reform and opening up of China. Pudong has attracted many of the world’s largest financial firms to establish a presence and is also a popular residential area for some of China’s most wealthy people. The area is also home to Lujiazui Finance and Trade Zone and the

Shanghai Stock Exchange as well as many of Shanghai’s most notable buildings includ-ing the Oriental Pearl Tower, the Jin Mao Tower, the Shanghai World Financial Center and China’s tallest structure, the 632 m tall Shanghai Tower Properties in Pudong now achieve higher rental levels compared to the historic Puxi area on the opposite side of the river.


recently as the early 1990s, the Pudong area of Shanghai was mainly farmland. Commercial development in the area was

limited to a few warehouses and wharfs on the riverfront. In 1990 the Central Committee of the Communist Party of China (CCCPC) and the State Council announced plans to re-devel-op Pudong, a move which ushered in the rapid development of the area.

BACKGROUND

As

CASE STUDY: PUDONG

2013

25 years later, Pudong has become a thriv-ing commercial and financial centre of Shanghai and stands as a symbol of Shang-hai’s modernisation and the reform and opening up of China. Pudong has attracted many of the world’s largest financial firms to establish a presence and is also a popular residential area for some of China’s most wealthy people. The area is also home to Lujiazui Finance and Trade Zone and the

Shanghai Stock Exchange as well as many of Shanghai’s most notable buildings includ-ing the Oriental Pearl Tower, the Jin Mao Tower, the Shanghai World Financial Center and China’s tallest structure, the 632 m tall Shanghai Tower Properties in Pudong now achieve higher rental levels compared to the historic Puxi area on the opposite side of the river.

27© CBRE Ltd. 2015

Development Timelinefor the core of Pudong New Area - Lujiazui Financial District

BEGINNING PHASE HINDER ACCELERATE BOOMING

Effected by 1997 financial crisis, development delayed

Developing municipal facilities

1,750,000 sq. m.

Mainly office, exhibition centre and retail developed

2002, Super Brand Mall opened (a large-scale shopping center)

Office/residential/tourism alldeveloping

3,000,000 sq. m.

Core area fully developed,2007 start expansion to east areas.

Improve supporting services for financial

229 multinational headquarters,308 companies named in the Fortune Global 500 and 143 headquarters of local companies

3,500,000 sq. m.

1990 - 1997 1997 - 2001 2001 - 2008 2008 - Now

1994Oriental Pearl Tower

Height: 468 m

1999Jinmao Tower

Height: 420 m

2015Shanghai Tower

Height: 632 m2008Shanghai World Financial Center

Height: 492 m

2002Bocom Financial Towers

Height: 230 m

Area established

Attract several financial institute in China, including CBC ICBC, Shanghai Stock Exchange Market

Cooperate with CHIA TAI, Mori Building Co.

600,000 sq. m.

Mainly Office

Pudong: 25-Year Summary Statistics -1990 vs.2014

Gross Domestic Product

Fiscal revenue 1RMB billion billion290RMB

6RMB billion 711RMB

billion

Headquarters of local companies.

Multinationalheadquarters

229 308 143Companies named in the Fortune Global 500


Incentives for Pudong

1990: Tax deductions, exemptions and other incentives for infrastructure investment.

1992: Pudong permitted to issue stocks and bonds to attract investment.

2002: Gold and diamond exchanges moved from downtown Puxi to Pudong.

2005: Foreign banks allowed to do business in local currency.

Projects in Pudong given status as “National Priority Projects”.

Allocation of Pudong annual Government loans of US$90 million.

“One-stop” approval procedures introduced for foreign-invested projects.

Reform of local administration to a simplified two-level structure. The Government of Pudong has authority equivalent to that of a sub-provincial Chinese city, half a level above the authority given to Shanghai’s other districts.

Introduction of a Special Economic Zone strategy. Pudong was granted status as a Pilot Free Trade Zone allowing a series of projects which are subject to lower levels of regulation.

Continued office construction, but increasing residential and retail


In order to support the development of Pudong authorities introduced a number of incentives to encourage development. These included:


Development Timelinefor the core of Pudong New Area - Lujiazui Financial District

BEGINNING PHASE HINDER ACCELERATE BOOMING

Effected by 1997 financial crisis, development delayed

Developing municipal facilities

1,750,000 sq. m.

Mainly office, exhibition centre and retail developed

2002, Super Brand Mall opened (a large-scale shopping center)

Office/residential/tourism alldeveloping

3,000,000 sq. m.

Core area fully developed,2007 start expansion to east areas.

Improve supporting services for financial

229 multinational headquarters,308 companies named in the Fortune Global 500 and 143 headquarters of local companies

3,500,000 sq. m.

1990 - 1997 1997 - 2001 2001 - 2008 2008 - Now

1994Oriental Pearl Tower

Height: 468 m

1999Jinmao Tower

Height: 420 m

2015Shanghai Tower

Height: 632 m2008Shanghai World Financial Center

Height: 492 m

2002Bocom Financial Towers

Height: 230 m

Area established

Attract several financial institute in China, including CBC ICBC, Shanghai Stock Exchange Market

Cooperate with CHIA TAI, Mori Building Co.

600,000 sq. m.

Mainly Office

Pudong: 25-Year Summary Statistics -1990 vs.2014

Gross Domestic Product

Fiscal revenue 1RMB billion billion290RMB

6RMB billion 711RMB

billion

Headquarters of local companies.

Multinationalheadquarters

229 308 143Companies named in the Fortune Global 500


Incentives for Pudong

1990: Tax deductions, exemptions and other incentives for infrastructure investment.

1992: Pudong permitted to issue stocks and bonds to attract investment.

2002: Gold and diamond exchanges moved from downtown Puxi to Pudong.

2005: Foreign banks allowed to do business in local currency.

Projects in Pudong given status as “National Priority Projects”.

Allocation of Pudong annual Government loans of US$90 million.

“One-stop” approval procedures introduced for foreign-invested projects.

Reform of local administration to a simplified two-level structure. The Government of Pudong has authority equivalent to that of a sub-provincial Chinese city, half a level above the authority given to Shanghai’s other districts.

Introduction of a Special Economic Zone strategy. Pudong was granted status as a Pilot Free Trade Zone allowing a series of projects which are subject to lower levels of regulation.



In order to support the development of Pudong authorities introduced a number of incentives to encourage development. These included:

29© CBRE Ltd. 2015

Buoyant demand from the financial sector and tight supply to make Pudong an overwhelmingly landlord market;

The rental gap between Pudong and Puxi stood at a 10-year high of 23% as of Q1 2015.

Office Pudong rents grew faster than Puxi

Suhe Creek OCTRMB 150,000 sq. m.

The Bound Of BundRMB 120,000 sq. m.

Tomson RivieraRMB180,000 sq. m.

Shanghai Arch RMB150,000 sq. m.

8.4

10.4

0

2.0

4.0

6.0

8.0

10.0

12.0

Q1

99

Q1

00

Q1

01

Q1

02

Q1

03

Q1

04

Q1

05

Q1

06

Q1

07

Q1

08

Q1

09

Q1

10

Q1

11

Q1

12

Q1

13

Q1

14

Q1

15

Ren

t: R

MB

/ sq.

m. /

day

Puxi Pudong

ONE CITY,TWO SCENARIOS

ResidentialResidential properties in Lujiazui riverside achieve higher level in the price spectrum compared to the historic Puxi area on the opposite side of the river.



Buoyant demand from the financial sector and tight supply to make Pudong an overwhelmingly landlord market;

The rental gap between Pudong and Puxi stood at a 10-year high of 23% as of Q1 2015.

Office Pudong rents grew faster than Puxi

Suhe Creek OCTRMB 150,000 sq. m.

The Bound Of BundRMB 120,000 sq. m.

Tomson RivieraRMB180,000 sq. m.

Shanghai Arch RMB150,000 sq. m.

8.4

10.4

0

2.0

4.0

6.0

8.0

10.0

12.0

Q1

99

Q1

00

Q1

01

Q1

02

Q1

03

Q1

04

Q1

05

Q1

06

Q1

07

Q1

08

Q1

09

Q1

10

Q1

11

Q1

12

Q1

13

Q1

14

Q1

15

Ren

t: R

MB

/ sq.

m. /

day

Puxi Pudong

ONE CITY,TWO SCENARIOS

ResidentialResidential properties in Lujiazui riverside achieve higher level in the price spectrum compared to the historic Puxi area on the opposite side of the river.


31© CBRE Ltd. 2015

LESSONS LEARNTFROM PUDONG

udong shares a number of similarities with Thu Thiem in terms of its geographical location, a connecting river tunnel and the same ambitious vision of

creating a new central business district overlooking the existing one across the river. Key factors behind the success of Pudong, which Thu Thiem would do well to learn from, include the following:

The Central Government empowered local authorities in Shanghai and Pudong with many privileges and selective intervention. The government of Pudong possesses authority equivalent to that of a sub-provincial Chinese city, half a level above the authority given to Shanghai’s other districts.

The development plan of Pudong was considered a national-level goal (Projects in Pudong were bestowed the status of “National Priority Projects”). However, this emphasis is lacking at Thu Thiem, which is considered to be a development project in HCMC, an not a major project of national importance. The Chinese

Central Government actively promoted Pudong on the world stage to raise global finance for the development of its infrastructure at a very early stage and also provided support during the Asian Financial Crisis.

The Central Government also introduced a Special Economic Zone strategy, with Pudong the only area to be granted the status of a Pilot Free Trade Zone. This privileged SEZ status led to the introduction of comprehensive reforms including tax deductions, exemptions and other incentives for infrastructure investment; Pudong permitted to issue of stocks and bonds; gold and diamond exchanges moved from downtown Puxi to Pudong; and “one-stop” approval procedures introduced for foreign-invested projects. These innovations have not yet been adopted in Thu Thiem. Other key economic zones around Vietnam have been bestowed with similar incentives as Thu Thiem and

P

The success of Pudong has been driven by a number of key factors, which Thu Thiem would do well to learn from.

therefore the area has not achieved the status of an engine for economic and financial development.

Pudong possessed an effective masterplan. Landmark buildings in Pudong are clustered around the exit of the tunnel linking the area with the historic city centre and reflect the real market value of this strategic location. In Thu Thiem, this area is reserved for sites of lower plot ratio, which is not capitalising on its true potential. Pudong has also converted port warehouses and wharfs on its riverfront into public areas such as green parks, shopping areas and promenades, creating a social hub for the area. In Thu Thiem, the recent conversion of port and shipyard facilities into a large township development on the West bank (or the existing central business district of HCMC) has negatively affected the attractiveness of Thu Thiem and discouraged relocation over the river.


33© CBRE Ltd. 2015

LESSONS LEARNTFROM PUDONG

udong shares a number of similarities with Thu Thiem in terms of its geographical location, a connecting river tunnel and the same ambitious vision of

creating a new central business district overlooking the existing one across the river. Key factors behind the success of Pudong, which Thu Thiem would do well to learn from, include the following:

The Central Government empowered local authorities in Shanghai and Pudong with many privileges and selective intervention. The government of Pudong possesses authority equivalent to that of a sub-provincial Chinese city, half a level above the authority given to Shanghai’s other districts.

The development plan of Pudong was considered a national-level goal (Projects in Pudong were bestowed the status of “National Priority Projects”). However, this emphasis is lacking at Thu Thiem, which is considered to be a development project in HCMC, an not a major project of national importance. The Chinese

Central Government actively promoted Pudong on the world stage to raise global finance for the development of its infrastructure at a very early stage and also provided support during the Asian Financial Crisis.

The Central Government also introduced a Special Economic Zone strategy, with Pudong the only area to be granted the status of a Pilot Free Trade Zone. This privileged SEZ status led to the introduction of comprehensive reforms including tax deductions, exemptions and other incentives for infrastructure investment; Pudong permitted to issue of stocks and bonds; gold and diamond exchanges moved from downtown Puxi to Pudong; and “one-stop” approval procedures introduced for foreign-invested projects. These innovations have not yet been adopted in Thu Thiem. Other key economic zones around Vietnam have been bestowed with similar incentives as Thu Thiem and

P

The success of Pudong has been driven by a number of key factors, which Thu Thiem would do well to learn from.

therefore the area has not achieved the status of an engine for economic and financial development.

Pudong possessed an effective masterplan. Landmark buildings in Pudong are clustered around the exit of the tunnel linking the area with the historic city centre and reflect the real market value of this strategic location. In Thu Thiem, this area is reserved for sites of lower plot ratio, which is not capitalising on its true potential. Pudong has also converted port warehouses and wharfs on its riverfront into public areas such as green parks, shopping areas and promenades, creating a social hub for the area. In Thu Thiem, the recent conversion of port and shipyard facilities into a large township development on the West bank (or the existing central business district of HCMC) has negatively affected the attractiveness of Thu Thiem and discouraged relocation over the river.

Official Website of Thu Thiem New Urban Area (http://www.thuthiem.hochiminhcity.gov.vn/)

Official Website of Pudong New Area Government (http://english.pudong.gov.cn/)

Howard Dawber, 2014. Canary Wharf: Lessons for Thu Thiem

Ngo Viet Nam Son, 2012. Thu Thiem New Face First Phase, Published on The Saigon Times on Jan 22, 2012.

Sasaki Associates, 2012. Thu Thiem 1/2000 Master Plan Adjustment

Yawei Chen, 2007. Shanghai Pudong: Urban Development in an Era of Global-local Interaction.

REFERENCES

hu Thiem has the potential to generate far-reaching improvements to life in Ho Chi Minh City and bolster the city’s image and standing on the

world stage. However, CBRE believes that radical new policies are required if the government’s vision of creating a “Pudong of Saigon” is to become a reality. The project must be accorded the status of a national priority and requires stronger support from the central government. Authorities should introduce special privileges and incentives to attract more investors to the area. In addition, the local government of Thu Thiem should be given special status by the central government to allow it to operate more effectively and enact policies which will assist and encourage the development of the area. If this is done, local and central governments will be able work together to encourage potential investors by introducing incentives such as tax deductions or exemptions.

It is vital that the investment procedure for potential foreign investors is made clearer and simpler. The introduction of a “one stop” approval procedure for foreign invested projects will remove much of the uncertainty that could be inhibiting investment; minimise speculation and prevent land prices from becoming prohibitively high. Other suggested measures include limiting approvals for projects on the West bank of the Saigon River as these may deflect potential investment away from Thu Thiem.

The implementation of the measures outlined above will ensure Thu Thiem will stand out as the single most attractive focus for potential investment in Ho Chi Minh City and will support its development as the city’s new economic and financial centre.

CONCLUSION

T


Official Website of Thu Thiem New Urban Area (http://www.thuthiem.hochiminhcity.gov.vn/)

Official Website of Pudong New Area Government (http://english.pudong.gov.cn/)

Howard Dawber, 2014. Canary Wharf: Lessons for Thu Thiem

Ngo Viet Nam Son, 2012. Thu Thiem New Face First Phase, Published on The Saigon Times on Jan 22, 2012.

Sasaki Associates, 2012. Thu Thiem 1/2000 Master Plan Adjustment

Yawei Chen, 2007. Shanghai Pudong: Urban Development in an Era of Global-local Interaction.

REFERENCES

hu Thiem has the potential to generate far-reaching improvements to life in Ho Chi Minh City and bolster the city’s image and standing on the

world stage. However, CBRE believes that radical new policies are required if the government’s vision of creating a “Pudong of Saigon” is to become a reality. The project must be accorded the status of a national priority and requires stronger support from the central government. Authorities should introduce special privileges and incentives to attract more investors to the area. In addition, the local government of Thu Thiem should be given special status by the central government to allow it to operate more effectively and enact policies which will assist and encourage the development of the area. If this is done, local and central governments will be able work together to encourage potential investors by introducing incentives such as tax deductions or exemptions.

It is vital that the investment procedure for potential foreign investors is made clearer and simpler. The introduction of a “one stop” approval procedure for foreign invested projects will remove much of the uncertainty that could be inhibiting investment; minimise speculation and prevent land prices from becoming prohibitively high. Other suggested measures include limiting approvals for projects on the West bank of the Saigon River as these may deflect potential investment away from Thu Thiem.

The implementation of the measures outlined above will ensure Thu Thiem will stand out as the single most attractive focus for potential investment in Ho Chi Minh City and will support its development as the city’s new economic and financial centre.

CONCLUSION

T

35

For more information about this regional major report, please contact

ReseaRch

Desmond SimHead of Research, Southeast Asia+65 [email protected]

Dung Duong, MRICSHead of Vietnam Research+848 3824 [email protected]

Ngoc LeSenior Manager+848 3824 [email protected]

CBRE GLOBAL RESEARCHThis report was prepared by CBRE Vietnam Research Team, which forms part of CBRE Global Research—a network of preeminent researchers who collaborate to provide real estate market research and econometric forecasting to real estate investors and occupiers around the globe.

All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness and currency of the information of this publication. This report is presented for information purposes only exclusively for CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without prior express written permission of CBRE. Any unauthorized publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.

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