Despite big difficulties, multi-billion dollar projects still wait in line

Huge project kicked off to welcome a new year

After getting license in March 2012, the joint venture between Japanese Tokyu Group and Vietnamese Becamex IDC in November 2012 kicked off the Sora Gardens I project, one of the three apartment blocks – the components of the Sora Gardens on the 110 hectare area in the new city of Binh Duong.

This would be a mammoth project with the total investment capital of 1.2 billion dollars.

The block is expected to provide a shopping mall and 413 apartments to the market, each of which covers an area of 70-100 square meters, not including the penthouses.

The start of the project is considered the only “light color” in the current dark picture of the domestic real estate market.

Hoshino Toshiyuki, General Director of Becamex Tokyu, said everything has got ready for the project. Besides the capital of its own, the investors would be financed by the banks from Japan.

Regarding the financial sources for the project, Nguyen Van Hung, President of Becamex IDC, the Vietnamese partner in the joint venture, said it would be impossible to implement big projects if just seeking domestic capital sources.

Why does Becamex Tokyu decide to start the project at this sensitive moment, when the real estate market is “hibernating”? Hoshino Toshiyuki also said that investors would certainly encounter risks in this period. The real estate prices have plummeted in Hanoi and HCM City, while real estate developers keep complaining about the unsalability.

However, the investors have every reason to keep their hopes. Binh Duong province, which has 28 industrial parks with the occupancy rate of 65 percent, is believed to still have high demand for real estate products. It is also expected that the administrative agencies of the province would relocate to the new city, which would lead to the strong development of the whole area.

Regarding the project implementation, the investors said the whole project would be completed within 10 years. Meanwhile, the Sora Gardens I would be inaugurated in the fourth quarter of 2014, while the sale would be opened in the fourth quarter of 2013.

Urban area developers get impatient

It is expected that some big urban area projects in HCM City and neighboring areas would resume in some days. These include the 900 million dollar international university urban area in Hoc Mon district in HCM City developed by Malaysian Bejaya Vietnam.

In the industrial province of Dong Nai, the Long Hung urban area developed by DonaCo.op is now under the construction. The investor said to date, 40 million dollars has been disbursed for the project implementation, which has been spent on site clearance and some infrastructure items.

The investor plans to deliver 500 apartments for resettlement by the end of the year. It would market some 2000 apartments by 2013, priced at 150 million dong at minimum, mostly targeting local buyers.

Besides the products in the resettlement area, the company would also offer the land plots next to the Long Thanh golf course to “explore the situation.”

These, according to DonaCo.op, would be highly profitable products when the Long Thanh – Dau Giay highway gets completed, slated for 2013. They would also help warm up the Dong Nai real estate market which has been quiet over the last year.

Meanwhile, the 600 hectare Can Gio urban area proves to be not lucky enough. Saigon Sunbay, the investor, is now still seeking other investors to join the project.