The Vietnamese real estate market is littered with many unfinished large-scale projects worth hundreds of millions of US dollars, and no one knows if and when they will be completed.
Daewoo Cleve, a $420 million residential project located in Hanoi’s Ha Dong district, began construction in October 2010. Developed by Korea’s Inpyung, the project halted construction more than a year ago when building had only reached the sixth floor.
Daewoo Cleve was once one of Hanoi’s largest residential projects, with the plan of erecting 15 buildings of up to 40 storeys, and the provision of 4,500 high-end apartments.
According to its plan, Inpyung had to hand over its first apartments by the end of 2013, however, little work had been completed by the deadline.
At the end of last year, a representative said the project would begin work again and the first apartments could be handed over in the second quarter of 2014.
However, progress never materialised and the project site has remained dormant.
When visiting the site, VIR saw little sign of activity, apart from a few security guards.
Ha Dong is also home to the long delayed Booyoung International Apartment Building.
Financed by Korea’s Booyoung Group, this project has fared even worse. Seven years after its ground-breaking ceremony, progress has only got as far as creating an area of bare land surrounded by walls.
The project, which started in 2007, was intended to include six 30-storey blocks of flats spread over 43,200 square metres, and providing 5,000 apartments. It was due to be finished by 2010.
After many changes to the design and adjustments to the investment licence, the project has seen no progress and it has been added to Hanoi People’s Committee black list of long-delayed projects.
Even though the developer repeatedly confirmed that it had the finances to continue the project, such a long delay raises doubts over the developer’s true capacity.
Long-delayed projects such as Booyoung’s and Inpyung’s are not rare in Vietnam. Such projects are a waste of space and a lost opportunity for other developers.
According to Professor Nguyen Mai, chairman of the Foreign Invested Enterprises Association, local authorities should be more active in choosing developers and investors, in order to avoid initiating projects which the developers do not have the capacity to complete.
In terms of finance management, Mai said foreign developers should contribute a good-faith deposit of $1 million when bidding for a project. This sum, which would be returned upon implementation of the project, would push developers to keep to their schedule.