According to the Master Plan for Hai Phong City’s development phase for 2021-2030, which was approved by the Prime Minister in December 2023, Thuy Nguyen district is slated to become a new city under Hai Phong’s administration by 2025. By then, Thuy Nguyen is expected to attain the status of a class-III urban area, with aspirations to further develop into a class-II urban center and become Hai Phong’s multi-sector economic hub by 2035.
To materialize this vision, several notable projects in Thuy Nguyen have been initiated, including a new administrative and political center spanning 324 hectares, the Thuy Nguyen Industrial Park covering 319 hectares, Hai Phong’s Ring Road 2, and the extended Duong Do Muoi Street. The Hai Phong People’s Committee plans to mobilize VND 285,400 billion in capital to continue Thuy Nguyen’s development through 2045.
Image of Thuy Nguyen district, Hai Phong city.
Vietcap believes that Thuy Nguyen is poised to lead Hai Phong’s real estate market. According to VARS, land prices in Thuy Nguyen surged by 50-100% in 2021 when plans to establish Thuy Nguyen city were announced, followed by a 15-30% decline during 2022-2023.
Following the official approval of the master plan to upgrade Thuy Nguyen to a city in December 2023, the district witnessed a 5-10% average increase in land prices and continued to lead Hai Phong’s real estate market in terms of transaction volume. VARS suggests that Thuy Nguyen’s land prices still have room for growth in the medium term due to its developing infrastructure and social amenities.
One of the significant beneficiaries of Thuy Nguyen’s burgeoning real estate market is Hoang Huy Investment Financial Services Joint Stock Company (TCH). TCH is also undertaking three real estate housing projects in Thuy Nguyen district, namely the Duong Do Muoi urban area, Hoang Huy New City, and Hoang Huy Green River.
These projects mark a significant transition for TCH, evolving from developing small and medium-sized projects under 5 hectares to undertaking larger-scale ventures of up to 49.6 hectares. Aside from Hoang Huy New City, which has already been constructed, the remaining land bank is slated for development between 2024 and 2028, as per the management’s plans. Vietcap anticipates that the transformation of Thuy Nguyen into a new city could bolster the absorption of TCH’s upcoming projects.
Moreover, TCH acquired the land banks for two of its projects, Hoang Huy New City and Hoang Huy Green River, at favorable costs through BT contracts with the Hai Phong People’s Committee. The company expects these projects to maintain attractive gross profit margins of over 40%, consistent with their previous BT land development projects.
Historically, TCH has secured multiple projects through BT contracts. In essence, a BT project involves an investor implementing an infrastructure project on behalf of the state and receiving payment in the form of money, land, or another agreed-upon method. The principle ensures equivalence in value and guarantees the investor a certain profit margin, typically ranging from 10-12%. Decree 69/2019 stipulates that the value of a BT project should be equivalent to the value of the public asset used for payment, determined by market value at the time of settlement.
According to Vietcap’s statistics, TCH currently holds a total of seven projects acquired through BT contracts, including completed, ongoing, and upcoming ventures. Numerous securities companies have previously asserted that obtaining projects through BT contracts could yield significant benefits for TCH, amounting to trillions of dong.
However, not all of TCH’s projects are acquired through BT contracts. For instance, the Duong Do Muoi project in Thuy Nguyen was obtained through a public auction. This project is also known by its commercial name, Hoang Huy New City – II, and is located in Tan Duong commune, Thuy Nguyen district, along the extended Duong Do Muoi Street. Spanning 49.6 hectares, the project offers villas, shophouses, and apartments.
TCH acquired this project in December 2023 through an auction with the Hai Phong People’s Committee and plans to invest VND 15,000 billion in its development, making it the company’s largest-scale project to date. TCH intends to finalize the project’s legal procedures and commence construction by July 2024.
Astonishingly high price for old and dilapidated apartment buildings reaching nearly 200 million VND/m2, rivaling the most luxurious condominiums in Hanoi
Old collective apartments with prices starting from 100 million VND/m2 are usually the first-floor units that can be used for commercial purposes, while the upper-floor units are priced at 60-80 million VND/m2 for residential purposes.
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