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Land value in Thu Thiem increased by 30 to 40 per cent in the past three years, according a recent report released by JLL Vietnam.
While this is a considerable bump, JLL believes it is sustainable for several reasons. Initial land values are coming off a relatively low base, the speed of infrastructure construction has increased dramatically during this past period, the most recent residential projects launched in Thu Thiem have witnessed strong demand, and finally Thu Thiem is the largest undeveloped parcel of clear, master-planned land near the city centre.
|Thu Thiem New Urban Area comprises 657 hectares, with 176 land parcels in total, more than 3.2 million square metres of accommodation, and 3.4 million sq.m of trading floor. It will be the new home of more than 145,000 residents and 217,000 labourers. To date, 10 investors have registered to invest in Thu Thiem, with total investment capital of $5 billion. Around 71 per cent of land plots (67 per cent of total land area and 81 per cent of total gross floor area) in Thu Thiem have been officially approved.|
“On average, Thu Thiem’s land price is approximately one-third of District 1’s, and relatively low compared to neighbouring districts such as districts 3 and 4,” said Stephen Wyatt, general director of JLL.
According to Yong-Beom Kim, manager at GS Engineering and Construction, Thu Thiem is designated as Ho Chi Minh City’s new central business district (CBD).
“After the completion and operation of the infrastructure – including Metro Line No. 2 and bridges No. 2, 3, and 4, connecting to districts 1 and 7 – Thu Thiem will be operating as planned,” Kim said.
In addition to land values appreciating in Thu Thiem, the neighbouring areas in District 2, such as Dong Van Cong, An Phu, and Thao Dien have also witnessed increasing land prices.
With rapid urbanisation, the establishment of Thu Thiem projects and some improvements in the legal and planning framework, it is reasonable to say that land prices will continue to increase over the coming years.
The largest beneficiaries from this price movement will be the early investors in Thu Thiem, as the higher risks that they had to bear in the early stages of development are compensated.
Cosimo Jencks, chief representative from Hong Kong Land, also said that with its refined master plan, disciplined authority, cleared land plots, modern infrastructure, and proximity to the current CBD, Thu Thiem will likely become Ho Chi Minh City’s most modern district, one which is urgently needed.
Thu Thiem is now home to different large-scale projects. Launched in 2015, Dai Quang Minh’s Sala project has sold 95 to 100 per cent of units, and recorded a 30 to 35 per cent increase in sales prices compared to when the units were first launched.
The Empire City project held launches in December 2016 and July 2017 for its Linden Residence and Tilia Residence projects, respectively. Both residential projects, totalling approximately 1,000 units, nearly sold out in the first few weeks after launch.
The average sale price of Tilia increased by approximately 20 to 25 per cent in comparison to Linden over the past six months.
With a booming high-end residential market and abundant opportunities for commercial development, District 2 has become the focal point for large-scale developments in the past three years. Because of the quality of the master plan and its proximity to District 1, Thu Thiem is possibly becoming the most attractive part of District 2.