On July 17, the National Assembly’s monitoring delegation conducted a field survey at two large-scale real estate projects in Da Nang that have faced legal complications and have been stalled for years: the Diamond Square commercial center, office, hotel, and luxury apartment project at 84 Hung Vuong Street, and the Phong Nam-Hoa Chau urban area project in Hoa Vang District.
At Diamond Square, the investor requested that the city include the challenges and obstacles posed by current legal regulations regarding the construction of commercial housing in the “Consolidated Report on the Status and Proposed Solutions to Obstacles Faced by Projects in Da Nang City” as mandated by the government.
Specifically, the investor proposed that the city suggest to the government to report to the National Assembly and seek permission to include Diamond Square in the list of projects proposed for a pilot program allowing the development of commercial housing through agreements involving the transfer of land use rights or the existing land use rights for other land.
According to a draft resolution by the National Assembly in June, the conditions for implementing commercial housing projects through such agreements include:
– The project must conform to the district-level land use plan or the construction and urban planning.
– The project must align with the local housing development program that has been decided and approved.
– The project must receive approval from the provincial People’s Committee regarding the agreement for the transfer of land use rights.
– The real estate business entity must meet the conditions stipulated in laws on land, housing, real estate trading, investment, and other relevant laws to be allowed to change the land use purpose for the project.
*Conditions for Implementing Commercial Housing Projects through Land Use Rights Transfer Agreements*
**Diamond Square Project Background:**
Diamond Square is a project located on prime land at the intersection of Nguyen Chi Thanh and Hung Vuong streets in Hai Chau District. However, it has been dormant for over a decade. The site was initially intended for the Meridian Far East commercial center, office, hotel, and luxury apartment project by Far East Vietnam Real Estate JSC. According to the investment certificate, the project had a total investment capital of VND 2,880 billion, with construction starting in May 2008 and completion scheduled for the second quarter of 2011. Nevertheless, the project has not been implemented, and the site has been left abandoned for over ten years, overgrown with weeds.
 Location of the Diamond Square Project at the intersection of Nguyen Chi Thanh and Hung Vuong streets, Da Nang. Source: Google Maps
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In 2019, the project was transferred and renamed the Diamond Square Commercial Center, Office, Hotel, and Luxury Apartment project with a scale of 31 floors, developed by Kinh Bac-Da Nang Company.
**Profile of the New Investor:**
The new investor, Kinh Bac-Da Nang Company, was established on December 4, 2018, in Lien Chieu District, with a primary business activity in real estate. At its inception, the company had a charter capital of VND 600 billion, wholly owned by the Urban Development and Investment Corporation (UDIC).
On August 19, 2020, the charter capital was increased to VND 720 billion and further raised to VND 1,091 billion by the end of the first quarter of 2023. However, after this capital increase, UDIC transferred its entire stake in Kinh Bac-Da Nang on March 29, 2023. According to UDIC’s report, the company made a profit of nearly VND 109 billion from this transaction. The cost of uncompleted basic construction of UDIC in the Diamond Square project as of January 1, 2023, was over VND 744 billion.
**Profile of the New Owner of Diamond Square:**
UDIC has not publicly disclosed the new owner of Kinh Bac-Da Nang. According to the author’s understanding, as of April 4, 2023, the owner of the enterprise changed from UDIC to Kinh Bac Service Joint Stock Company. However, the authorized representative for the VND 1,091 billion stake remains Mr. Vu Ngoc Anh, Vice Chairman of Saigon Telecommunication Technology Corporation (SaigonTel) – a company associated with UDIC and sharing the same Chairman, Mr. Dang Thanh Tam.
Kinh Bac Service Joint Stock Company was established in June 2004, headquartered in Que Vo Industrial Park, Bac Ninh Province, with its primary business activity in real estate. Before becoming the new owner of Kinh Bac-Da Nang, the position of Chairman and legal representative of Kinh Bac Service changed from Mr. Nguyen Son to Mr. Nguyen Tuan Long on March 24, 2023.
It is worth noting that Mr. Son is the brother of Mrs. Nguyen Thi Kim Thanh, Mr. Dang Thanh Tam’s wife.
Interestingly, after acquiring Kinh Bac-Da Nang, Kinh Bac Service’s business performance improved significantly, earning a pre-tax profit of VND 405 billion in the first four months of 2023, compared to a loss of nearly VND 47 billion in 2022.
In addition to the transfer relationship, UDIC also provided loans to Kinh Bac Service, with a total debt balance of over VND 475 billion as of March 31, 2024, comprising short-term loans of over VND 119 billion and long-term loans of over VND 356 billion. Conversely, Kinh Bac Service has made a deposit of VND 238 billion to UDIC for the transfer of assets attached to leased land and the right to sublease land at factories and offices in Que Vo and Trang Due Industrial Parks.
**Phong Nam-Hoa Chau Urban Area Project:**
Alongside Diamond Square, the Phong Nam-Hoa Chau urban area project by DMT has faced legal complications, causing delays in its progress for many years. DMT has repeatedly petitioned the city and relevant ministries and the government, but the issues remain unresolved. Therefore, the investor requested the monitoring delegation to consider and provide guidance and directions to the city and relevant departments to expedite the land handover procedure for the project.
The representative of the Department of Natural Resources and Environment acknowledged that, in 2012, there was a lapse in following the necessary procedures for issuing the land allocation decision for the project, which was an oversight on the city’s part. Thus, to resolve this issue, an independent assessment is required to enable the enterprise and state agencies to fully exercise their rights and obligations in executing the project, ensuring no state budget losses.
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