German medical equipment trader Schmidt Group won approval to alter its licence for a real estate development in Hanoi, a move the firm said would help it revive the long-stalled project.
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The MPI has issued an amended licence allowing Schmidt Group to develop an office, residential and retail complex with units for sale rather than merely for lease, as the licence originally permitted a decade ago.
Preben Hjortlund, general manager of Schmidt Vietnam, said the company was looking for financial partners to begin building the $67 million facility by the end of the year.
The company has finished a rough design for the project that calls for the development of apartment, office and retail blocks covering 1.6 hectares, providing 80,000-100,000 square metres of floor space, with construction slated to be completed in two years. Schmidt received a licence around 10 years ago to build the complex along with a $20 million office-for-lease project nearby. However, the German firm was only able to finish construction of the office tower as real estate demand plummeted amid the Asian economic crisis.
“The amended licence will make it easier to go ahead with the project,” said Hjortlund, who also serves as vice president of the European Chamber of Commerce in Hanoi.
Developing housing accommodation for sale in Vietnam gives quicker returns than just leasing, as developers are able to sell apartments before construction is even completed.
“There is room for residential development,” said Hjortlund, pointing to the critical need for better residential space in Hanoi.
He said the general housing market could slow down in the future due to current projects, but there will always be demand for quality accommodation.
Hjortlund said the complex would have a retail centre, a facility in short supply in Hanoi’s growing economy.
He said Vietnam was one of the few countries in which Schmidt had chosen to move away from trading in medical and technological equipment and into other activities.
The German firm also operates the 10,000 sqm Hanoi International Technology Centre on Xuan Thuy street which is currently fully occupied.