Ho Chi Minh City Plans Auction for 'Golden Land'

A Series of Land Plots Set for Auction

Following the nullification of auction results for four land plots (lots 3-5, 3-8, 3-9, 3-12) in Thủ Thiêm New Urban Area due to businesses failing to meet financial obligations as per regulations, authorities in Ho Chi Minh City have decided to temporarily halt the auction plan for remaining land plots. This pause aims to assess the impact, draw lessons from the experience, and determine the appropriate timing for continuation. Recently, the Department of Natural Resources and Environment of Ho Chi Minh City, representing Working Group 3588 (the advisory group for the People's Committee of Ho Chi Minh City), announced plans to auction land lots and 3,790 apartments in Thủ Thiêm New Urban Area.

Specifically, lot 1-2 covers an area of 7,886.7 square meters and is designated for a multi-functional residential area, while lot 1-3 spans 5,006.6 square meters and is planned for a similar purpose. The completion of legal documents for the auction is expected by May 14, 2024, with the auction anticipated to take place before July 31, 2024.

Lot 3-5, spanning an area of 6,446 square meters, is earmarked for a mixed-use apartment complex categorized as multi-functional residential land, integrating commercial and service functions. Documentation for the auction is slated to be completed before June 18, 2024, with the expected auction scheduled before September 10, 2024.

Lot 7-1, situated in functional area 7 and covering an expansive 74,393 square meters, is designated for a resort hotel adhering to international standards. This hotel will be constructed on a small island, blending seamlessly with the river landscape and surrounding vegetation. The preparation of documents and the selection of the unit to conduct the auction are set to be completed before October 15, 2024, with the anticipated auction date before November 20, 2024. However, this estimated timeline may be subject to adjustments based on the auction outcomes for lots 1-2, 1-3, and 3-5.

Furthermore, city leaders have outlined plans to auction several other land lots in 2024 and 2025. Under Functional Area No. 1, four lots are identified: lot 1-5 (covering an area of 8,377.9 square meters, designated for multi-functional residential planning), lot 1-6 (area of 5,618 square meters, designated for multi-functional residential planning), lot 1-9 (spanning 12,944.8 square meters, designated for multi-functional commercial planning), and lot 1-10 (covering 8,761.2 square meters, designated for multi-functional commercial planning). The auction for these land plots is expected to occur before September 5, 2025.

For Functional Area No. 3, three land plots are highlighted: lot 3-8 (with an area of 8,568 square meters, planned for apartment buildings without commercial and service functions), lot 3-9 (area of 5,009 square meters, designed for residential use with commercial and service layout), and lot 3-12 (covering 10,059.7 square meters, designated for housing with combined commercial services). The auction for these land plots is projected to take place before November 28, 2025.

Additionally, various land lots with commercial, sports, and entertainment functions are slated for auction, including lot 2-22 (covering 25,026 square meters, designated for sports facilities), Lot CV2 (with an area of 60,450 square meters, planned for a theme park), and Lot 1-12 (spanning 31,995.9 square meters, designated for a conference center, hotel, and commercial services). Notably, for the 3,790 apartments in lots R1, R2, R3, R4, and R5, preparation of service documents for the auction is scheduled before July 7, 2024, with the expected auction implementation before September 26, 2024.

Learning from Past Auctions in Thu Thiem New Urban Area

The City People's Committee has instructed relevant departments and branches to diligently review, advise, and propose legal procedures. Specifically, the proposed report suggests a shift from the resettlement housing fund target to commercial housing. Additionally, there is advice regarding the establishment of public ownership for common-use construction elements such as corridors, stairs, parks, walkways, etc. Before deciding to auction off land plots in Thu Thiem New Urban Area soon, city leaders have meticulously considered and drawn lessons from businesses relinquishing their winning bids in the previous auction.

During the seminar on "Lessons Learned from Thu Thiem Land Auction and Institutional Recommendations," organized by the Ho Chi Minh City Development Research Institute, experts highlighted valuable lessons. They emphasized that the prices offered by businesses were excessively high compared to the central urban areas of the city and called for a reassessment. Dr. Nguyễn Hữu Nguyên from the Ho Chi Minh City Planning Association suggested evaluating the cash flow of auction participants, examining group benefits, and scrutinizing instances where investors borrowed money to bid on land, later using the property as collateral. Mr. Lê Hoàng Châu, Chairman of the Ho Chi Minh City Real Estate Association, urged authorities to require organizations and individuals participating in auctions to commit to capital sources and project implementation according to the plan. This approach aims to ensure that investors with genuine capacity and a commitment to project execution are selected after winning the auction.

Experts propose long-term solutions to address issues such as "price racing" and the dropping of deposits in land auctions. They suggest amending the provisions of the Law on Asset Auctions and related regulations to create cohesion. Specific regulations on standards for auction participants and evaluation criteria for proposed projects by winning bidders are deemed necessary to enhance the feasibility of auction results.

Trà Giang