THU THIEM THE PUDONG OF SAIGON CBRE Global Research © CBRE Ltd. 2015 1 THU THIEM Over the past 300 years HCMC has grown from a small riverbank settlement into a bustling city of over eight million inhabitants. The development of Thu Thiem is now taking shape to create a new financial and economic centre for the city. 2 HCMC | Thu Thiem - The Pudong of Saigon THU THIEM Over the past 300 years HCMC has grown from a small riverbank settlement into a bustling city of over eight million inhabitants. The development of Thu Thiem is now taking shape to create a new financial and economic centre for the city. © CBRE Ltd. 2015 3 CONTENTS EXECUTIVE SUMARY Executive Summary Located across the Saigon River from District 1 and 05 possessing a huge land bank of 657 hectares, Thu Thiem is to be redeveloped as a new centre of HCMC. Introduction 06 Planning for the Thu Thiem New Urban Area began as early as 1996. However, to date only a tunnel and a bridge have been completed to connect Thu Thiem to the rest of the city. About Thu Thiem Four other bridges and a metro link are still either Location under-construction or under planning. Land Information 09 Why Thu Thiem? Land-Use Plan More than 99% of land in the district has already been cleared Building Height Plan with a total compensation cost of about US$800 million. Land Allocation Infrastructure By the end of 2014, 2,460 of a total of 123,500 resettlement apartments had been completed and handed over. 20 Major Approved Projects In July 2015, the first residential project was launched in Thu High-end Condominium Thiem by local group Dai Quang Minh at a selling price of 22 Price Comparison US$2,000 to 2,800 per sq. m., marking a new milestone in the development of the area. What is holding back A number of challenges remain for investors, including the lack Thu Thiem? 24 of properly developed infrastructure and high land prices. Opportunities Challenges 26 Pudong Case Study Lessons Learnt 32 from Pudong Conclusion and References 34 CBRE GLOBAL RESEARCH This report was prepared by CBRE Vietnam Research Team, which forms part of CBRE Global Research—a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate. © CBRE Ltd. 2015 Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE. 4 HCMC | Thu Thiem - The Pudong of Saigon CONTENTS EXECUTIVE SUMARY Executive Summary Located across the Saigon River from District 1 and 05 possessing a huge land bank of 657 hectares, Thu Thiem is to be redeveloped as a new centre of HCMC. Introduction 06 Planning for the Thu Thiem New Urban Area began as early as 1996. However, to date only a tunnel and a bridge have been completed to connect Thu Thiem to the rest of the city. About Thu Thiem Four other bridges and a metro link are still either Location under-construction or under planning. Land Information 09 Why Thu Thiem? Land-Use Plan More than 99% of land in the district has already been cleared Building Height Plan with a total compensation cost of about US$800 million. Land Allocation Infrastructure By the end of 2014, 2,460 of a total of 123,500 resettlement apartments had been completed and handed over. 20 Major Approved Projects In July 2015, the first residential project was launched in Thu High-end Condominium Thiem by local group Dai Quang Minh at a selling price of 22 Price Comparison US$2,000 to 2,800 per sq. m., marking a new milestone in the development of the area. What is holding back A number of challenges remain for investors, including the lack Thu Thiem? 24 of properly developed infrastructure and high land prices. Opportunities Challenges 26 Pudong Case Study Lessons Learnt 32 from Pudong Conclusion and References 34 CBRE GLOBAL RESEARCH This report was prepared by CBRE Vietnam Research Team, which forms part of CBRE Global Research—a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate. © CBRE Ltd. 2015 Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of CBRE. © CBRE Ltd. 2015 5 INTRODUCTION HCMC is set to continue to hectares expand at a rapid rate and the 657- development of Thu Thiem will offer permanent foreign investors myriad opportunities. 145,500 - residents hu Thiem is a 657 hectare site transformation of Thu Thiem into an lakeside road, a riverside road and a and will feature an 86 storey located in District 2, on the international financial and 12 km long flyover. Work is structure, one of the tallest in South opposite side of the Saigon commercial centre. When scheduled to finish within the next East Asia, in addition to a high-end T River from District 1 and the development is complete, Thu Thiem 36 months. shopping mall, a 5-star hotel, Central Business District. Even will have a resident population of offices, serviced apartments and though it is relatively close to the 150,000 and a daily working In July 2015, local developer Dai underground parking. centre of HCMC, Thu Thiem is population of 220,000. Links to other Quang Minh launched the first largely a Greenfield site and until parts of HCMC will include a tunnel residential project in Thu Thiem at As HCMC continues to expand, the recently has had little connection (now completed), four road bridges prices ranging from US$2,000 to development of Thu Thiem will offer with the rest of the city. (one already completed), a US$2.800 per sq. m., marking a new significant opportunities in pedestrian bridge, a metro link and milestone in the development of construction and real estate and as a Thu Thiem was identified by the HCMC’s existing waterway network. Thu Thiem. location for business growth. Vietnamese government as a key However, the pace of development to potential development area for a new The first bridge linking Thu Thiem to The most visible new structure in date has not met expectations, Central Business District in 1996. Binh Thanh District opened to traffic Thu Thiem will be the part of the mainly due to infrastructure and The plan envisages a sustainable, in 2008, but it was not until the 14.5 hectare Empire City Project high land prices. mixed-use project that incorporates opening of the Thu Thiem tunnel in which was recently approved. The commercial and residential areas in 2011 that Thu Thiem truly became project will be developed by a joint This report examines the addition to schools, offices and open accessible from existing parts of the venture between Tien Phuoc JSC., opportunities that Thu Thiem will public spaces. HCMC downtown area. Tran Thai Co. Ltd., Denver Power offer as well as the challenges that it Ltd (UK) and GAW Capital Partners. must overcome in order to establish US architecture firm Sasaki Work on internal roads within the It will be located directly opposite itself as the new centre of HCMC. Associates was commissioned in Thu Thiem area began in 2014. the existing HCMC downtown area 2003 to produce a plan for the When complete, these will include a 6 HCMC | Thu Thiem - The Pudong of Saigon INTRODUCTION HCMC is set to continue to hectares expand at a rapid rate and the 657- development of Thu Thiem will offer permanent foreign investors myriad opportunities. 145,500 - residents hu Thiem is a 657 hectare site transformation of Thu Thiem into an lakeside road, a riverside road and a and will feature an 86 storey located in District 2, on the international financial and 12 km long flyover. Work is structure, one of the tallest in South opposite side of the Saigon commercial centre. When scheduled to finish within the next East Asia, in addition to a high-end T River from District 1 and the development is complete, Thu Thiem 36 months. shopping mall, a 5-star hotel, Central Business District. Even will have a resident population of offices, serviced apartments and though it is relatively close to the 150,000 and a daily working In July 2015, local developer Dai underground parking. centre of HCMC, Thu Thiem is population of 220,000. Links to other Quang Minh launched the first largely a Greenfield site and until parts of HCMC will include a tunnel residential project in Thu Thiem at As HCMC continues to expand, the recently has had little connection (now completed), four road bridges prices ranging from US$2,000 to development of Thu Thiem will offer with the rest of the city. (one already completed), a US$2.800 per sq. m., marking a new significant opportunities in pedestrian bridge, a metro link and milestone in the development of construction and real estate and as a Thu Thiem was identified by the HCMC’s existing waterway network.