Foreign firms cooling heels
Those projects are mostly large scale with an estimated investments of $170-$500 million when developers registered them with the authorities Work has halted on such high-profile projects as Da Phuoc Urban Development and Jade Centre in Danang, Booyoung International Residential area in Hanoi, VinaCapital Times Square in Hanoi and the Halong Star hotel in Quang Ninh.
But for now, those figures seem to exist only on paper as the disbursements of the developers have been very modest.
In Hanoi, the Korean developer of the Booyoung International has repeatedly told VIR that work on the project was about to resume. But there has been very little movement seen in this project six years after it started.
Slow progress is also evident at the Vietnam Financial Centre and Vietnam International University developed by Berjaya in Ho Chi Minh City with total investment capital of more than $4.5 billion.
Apart from the shortage of financial resource, projects’ developers explain that they would also face difficulties if they build their projects because the sales rate is very low.
Meanwhile, some other foreign-invested projects facing different troubles. Vinaconex and Posco E&C, the developer of $2.1 billion Splendora in Hanoi, are facing heated complaints from its customers.
The customers are claiming they have made big losses because the consumer price index (CPI) was used as a barometer for pricing semi-detached and villas with poor materials in this project.
Meanwhile, the Parkcity in Hanoi, a development invested by a joint venture between domestic Vinaconex Hoang Thanh and Malaysia’s Perdana Parkcity, has been delayed for one year after the foundation was finished.
No movement has been seen at the project site as the joint venture is said to be seeking a solution for a sinking foundation, which can cost hundreds of billions Vietnamese dong.
Moreover, foreign-backed projects are also facing with the withdrawal from customers after signing agreement to buy accommodations.
According to the updated report issued by Vinaland Fund under the management of VinaCapital,
in the first eight months of this year, only 58 units were sold from its projects such as Dai Phuoc Urban Area located in Dong Nai province, My Gia Urban Area in Nha Trang, Danang Beach Resort and Azura Apartment Building. Moreover, many customers from those projects have decided to delay payments or cancelled contracts.
The difficulties of the market were described as "extremely challenging.” Vinaland Fund said it will not invest in new projects and focus only in the development or divestment from current projects.
