AMCHAM Presentation (2019.09.04) Yat Sun Ng, AIA Deputy Chief Design Director Alpha King Real Estate Development Joint Stock Company
“A Developer’s perspective on the difficulties and benefits of developing in Vietnam covering legal issues with permitting and expanding new technology into new residential and commercial products.”
D 3
D eveloping as a D eveloper in a D eveloping country
Architect x Developer D esigner (11 years) 90s-03s 70s-90s D eveloper (11 years) D reamer (?? years) 18s--?? 03s-18s
D 3
About the opportunities
City Growth with Happy Faces
Source from CBRE
Source from CBRE
Source from CBRE
On An Upward Trend Historical Price and Rental Performance – District 1, District 2, District 7 200 180 160 140 120 Index 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Q1 2016 D1 Luxury Condominiums - Primary Price Index D2 High-end Condominiums - Primary Price Index D7 High-end Condominiums - Primary Price Index D1 Buy-to-let Apartments - Rental Index Source: CBRE Vietnam, Q1 2016.
About the land
Ho Chi Minh City, 1990s Source from CBRE
HCMC 2019
Shanghai, 1990 Source from CBRE
Shanghai, 2019 Source from CBRE
Districts Cu Core CBD I Chi 12 New-Tier 1 area II Thu Duc Go Vap Line 1 New-Tier 2 area III Around 110,000 Undeveloped Binh Tan foreigners living in HCMC IV Thanh Binh according to the records Phu from the police Nhuan department Tan Phu 2 1 3 Ben Thanh 10 Market 11 4 5 Binh 4 Tan 7 6 8 Freeway system Subway line no.1 Binh Subway line no.2 Chanh Subway line no.3 Nha Be Line 2 Line 5 2 km Scale 2 mi
About the development process
Vietnam Government Structure for Design Submission People ’ s Committee Ministry of Transportation Fire fighting Police/ Dept Ministry of (MOT) (FP) Construction (MOC) State te level el City y level el Department of Natural Department of Department of Department of Other Resource and Planning and Construction Transportation Departments Environment (DONRE ) Architecture (DPA) (DOC) (DOT) Commit itte tee e of Archit itec ecture e and Plan anni ning ng Counci cil (CAPC)
PACKAGE PREPARED BY APPROVED BY Detail Master Plan 1/2000 Architects, infrastructure PC ; DPA (peoples Committee; consultant Department of Planning) Architectural Master Plan Approval Architects Office/ DPA 1/500 (General Layout Plan, GLP) Basic Design (Schematic Design) Architects, MEP , Structure Department/ Ministry of Construction depending on project scale ( DOC/ MOC ) Technical Design (Design development/ Architects, MEP , Structure Department/ Ministry of Construction Design) Construction depending on project scale ( DOC/ MOC ) Construction permit (Building Permit) Architects, MEP , Structure Department/ Ministry of Construction depending on project scale ( DOC/MOC )
PACKAGE PREPARED BY APPROVED BY Environmental Impact Assessment (EIA) EIA Consultant Department of Resources and Environment Technical Infrastructure connection MEP Relevant authorized companies and departments Transportation connection MEP Consultant Traffic Office/ Department of consultant transportation ( DOT ) Fire Fighting Documentation (FFD) Fire fighting and MEP Fire fighting police consultant and Architects office/Department ( FP ) Notes: These submissions are typically required for Basic Design Submission however depending on the projects and the local authorities the EIA can be submitted after Basic Design but before Technical Design. The Fire Approval can also be split into 2 stage submissions. A simpler package for Basic Design and the full Fire Package for Technical Design.
Permit rmit submiss issio ion n stage e 1 ( (master er planning ning) Detail Master Plan Committee of Architecture & Planning 1:2000 Council, HCMC (CAPC) To Technical Dept for Preliminary Approval; for iconic project might need to Dept of Transp spor ortat ation ion (DOT) T) add competition stage Traffic Connection Aviation Master Plan 1:500 Aviat ation ion Dept (Building Height) (GLP) Utility Connection Respectiv ive Govern rnme ment (eg: Water Supply, T echn hnic ical Dept Power Supply, Sewage Controlle olled Utility ity Compan anie ies Discharge ) Submi missi ssion on Prio ior to Basic ic Design n Environment Submi missi ssion on HCM DONRE Impact Assessment (EIA) Fire Fighting & Prevention on Fire Fighting Police ce (Hanoi) oi) Approval
Permit rmit submiss issio ion n stage e 2 & & 3 ( (Basic sic/ T echnical chnical Design ign & C & Construct tructio ion n Perm rmit) it) Basic Design Audit Basic Design by Approved 3 rd Party Checker Approval MOC (> 20 Storey or 28m) – need approval in Hanoi Technical Design DOC (< 20 Storey or 28m) – Technical Design Audit Approval Local approval only by Approved 3 rd Party Checker Construction DOC Permit 1) MOC / DOC Approved 3 rd Party Checker 2) Fire Fighting 1) Internal 3) STP Submission Submission & 2) HCM Fire Fighting & Prevention Police Inspection/ As Built & Inspection Inspection 3) HCM Natural Resources & Environment Dep (DONRE) Building Operation Permit MOC (> 20 Storey or 28m) – need approval in Hanoi Pink Book (Buyer’s DOC (< 20 Storey or 28m) – Ownership Certificate) Local approval only
Land d Acquisi uisition tion stage e checkpoint eckpoints s (T (Technic chnical) al) Contain ain lot t coordin inat ates es; ; lot t outlin tlines es; ; sizes; ; redlin lines (not t Potential ial Land for r Acquire e LURC – Land setbacks ks- e.g. . road ad/ traff affic ic route te area ea which ich cannot t be occupy y purchase se use right certificat ificate even with thin in the proper erty lines) ) ; might t also conta tain in heig ight, , covera erage e requir uirem ements ents..et ..etc Business registration, investment company set up, FDI, legal procedures need to be ready prior to development/ investment license to be submitted and approved by authorities. Due Diligence gence -- -- CRITIC ICAL L CHECK POTENTIAL ENTIAL RISKS S includin uding g the previous ious approved oved histori ories es of t the site, e, ownersh ship ip verif ific icat ation on issue, e, banki king g finance nce or previous ious debt issues es, , existin ing g local al residents dents relocati cation on issues, es, infras astruc uctur ure e ownership… Upon proven ven the e owner ership ip of the e lan and, , land owner er Acquire Basic c parame meters s of the site from m DPA- can submit mit lett tter er to DPA to request t for deta tail il site e legal l (Depar artme ment of Plannin ing and Archite itect cture) e) develop elopmen ment t paramet meter ers Proceed to 1/2000 Master Majo jor chan anges es request in Plan – VERY LONG PROCESS violation of the approved TIME , risk for non-approval development parameters NO chan anges es in violation of Proceed to 1/500 Master Plan the approved - GLP submission (general development parameters layout plan)
Difficulties ----- Time control Sample project – SUBMISSION HISTORY APPROVED BY HCM 07 Dec 1998 GENERAL MASTER PLAN CITY PEOPLE ’ S COMMITTEE APPROVED BY HCMC ’ S 23 Nov 2000 MASTER PLAN 1:2000 CHIEF ARCHITECT APPROVED BY HCMC’S 07 Sep 2001 MASTER PLAN 1:500 CHIEF ARCHITECT APPROVED BY PEOPLE’S 13 Aug 2001 Adjustments to Approved Master Plan APPLIED BY COMMITTEE OF 30 Sep 2011 1:500 (PRIVATE DEVELOPER #1) DISTRICT 2 APPROVED BY HCM Adjustment to Approved Master Plan APPLIED BY 26 Sep 2013 CITY PEOPLE’S 1:2000 (PRIVATE DEVELOPER #1) COMMITTEE APPROVED BY HCM Approval for adjustments on number APPLIED BY 5 Oct 2015 CITY PEOPLE’S of units, population and planning (PRIVATE DEVELOPER #1) COMMITTEE parameters of Plot A APPROVED BY Adjustment to Approved Master Plan APPLIED BY 11 Apr 2016 PEOPLE’S COMMITTEE 1:500 (PRIVATE) DEVELOPER #2 OF DISTRICT 2
Challenges of developing in Vietnam 1. Land Issues (due diligences) 2. Political / jurisdictions issues (submission) 3. Time control (approvals) 4. Financial consideration (IIR, financing sources, legal) 5. Construction management (local labor conditions) 6. Facility management and customer services (brand development)
About the technologies and the future
THE OPPORTUNITIES ARE REWARDING What opportunities does HCMC have? Intelligent Updated Increased Healthier Technology in Energy transportation infrastructure safety citizens schools management Reducing traffic Leverage existing Crimes are down as E-healthcare E-learning can reach Reduce energy fuels economic infrastructure to much as 70% since reduces operating more students, consumption in growth create smart cities 1981 in G7 costs by 30% and reduce costs, and buildings by up to countries. labor costs by 25% grow graduation 30% rates from 55 - 78%.
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