Business  » Property

When the National Assembly signed off on the Master Plan to develop Hanoi to 2030 with a Vision towards 2050 in July last year, a number of ministries and state offices are prepared for a move out to the capital’s suburbs. This has created opportunities for investors to jump in and develop those ministries’ former homes.

A number of state agencies are packing their bags and moving to the new administrative centre in the west of Hanoi.

As part of the already-approved Master Plan to develop Hanoi to 2030 with a Vision towards 2050, the city’s new administrative heart will be in the My Dinh and Me Tri communes of Tu Liem district, and West West Lake areas of Tay Ho district.

Since mid-2011, a number of ministries have been on the move to new premises along Pham Hung street.

The State Inspectorate was the first to go. Previously located in Doi Can street in Ba Dinh district, the agency is now at home in Nguyen Phong Sac street in Cau Giay district. Meanwhile, construction of the headquarters of the Ministry of Public Security is near completion in Pham Van Dong street.

Others moves in the pipeline are the ministries of Natural Resources and Environment, Science and Technology, Foreign Affairs, Home Affairs and Transport. This will mean some empty real prime estate for Vietnam’s capital.

Last week, the Construction and Investment Management Board of the National Historical Museum – assigned by the Ministry of Construction (MoC) to be in charge of the new building of this ministry’s office – issued an invitation to call on investors to participate in the construction of this project.

According to this announcement, the new MoC building will be built using the build-transfer model. In October, last year the government had agreed to move the MoC from Le Dai Hanh street at the centre of Hanoi to the West West Lake project in Tay Ho district.

Opportunities for investors

With ministries on the way to the suburbs, their old venues are considered golden land in Hanoi and there are good opportunities for developers to jump in. Meanwhile, the government has mapped out that ministries’ leaders could mobilise the investment capital to seek for land and develop the future office by auctioning the old premises.

This could be a very good opportunity for developers and investors. But experts warn that both ministries’ leaders and developers must be careful. According to Tran Ngoc Chinh, chairman of the Vietnam Urban Development and Zoning Association, it was not easy to choose investors for those projects.

Part of the difficulty stems from the fact that ministries were moved to suburbs to reduce the pressure of population and traffic jams for the inner urban area and to form a concentrated administrative zone under the government’s policy and Hanoi’s development plan.

Meanwhile, one of the most beneficial and economical prospects for property developers is the construction of high-rise buildings and property complexes. Such projects, however, would be counterproductive to the government’s target and won’t be approved.

This has left developers scratching their heads as to how they might recover the big money they would need to pay the ministries for the properties in question. Chinh suggested the government should have “special policies” for those land plots, in order to meet the needs of the government and investors.

“We could use the government budget or even private investment capital to invest in this ‘golden land,” said Chinh.