HCMC seeks developers to build apartments in crowded downtown market

By Le Tuyet   June 28, 2024 | 03:44 pm PT
HCMC seeks developers to build apartments in crowded downtown market
An aerial view of the Ga-Gao market in downtown Ho Chi Minh City. Photo by VnExpress/Quynh Tran
Authorities in HCMC's District 1 are looking for investors to build apartments at the spot where Ga-Gao market stands now, hosting vendor families in deteriorated quarters.

The traditional market is in Cau Ong Lanh Ward between Nguyen Thai Hoc, Vo Van Kiet, Co Giang, and Yersin streets. It has existed since before 1975, when the south had still not reunified with the north.

The market has narrow walkways about a meter wide. The small stalls serve both as shops and living quarters for vendors and their families.

Over time they have deteriorated, becoming damp and failing to meet fire safety standards.

In fact, there have been several fires, with the last one, at the end of 2015, destroying 13 stalls.

"For nearly 50 years this market area has not been redeveloped, leaving people here living in cramped conditions," District 1 Party chief Duong Anh Duc said at a meeting with businesses interested in the Ga-Gao market project on Thursday.

"Many investors have come and gone. This time the district hopes businesses will propose feasible solutions."

Duc said toilets are shared between many families and people have to take turns sleeping because their space is too small to allow everyone to lie down at once.

Authorities are therefore keen to carry out this project to improve the quality of life for residents here.

Ga-Gao market spreads over an area of 6,300 sq.m.

According to current regulations, the maximum height of the apartment building will be 50 m (10-14 floors) with a population of 700 people.

In line with that, the project will affect 290 households with 1,173 residents currently living there.

Duc said the plan to seek investment has been in place for a long time, but many prospective developers turned down the project saying it was "not profitable."

Nguyen Le My Hung of major property development company Novaland said over 6,000 sq.m of land with a use coefficient of 10 is significant in a central area like District 1.

The "use coefficient of land" measures how much of a piece of land is covered by buildings or structures. It is calculated by dividing the total area of all buildings by the total land area, indicating how intensively the land is used.

But the maximum construction density of 50% and height limit of 50 m mean only around 600 apartments could be built each with an area of 50 sq.m.

If the existing residents want to be resettled in the same area, the developer needs to provide them with 300 apartments, leaving only 300 for commercial sale, "too little" to ensure reasonable profits, he said.

He suggested calculating the total cost of the project, including normal profits, and making adjustments to the coefficient based on it.

Le Thanh Nam from another major property developer Bitexco Group made a similar suggestion, saying since the site has a fairly large frontage, the maximum height of the towers should be increased to 80 m, allowing 24-30 floors to be built.

Based on this, the occupancy should be revised from 700 people to 1,400.

"The existing population is over 1,000, and planning for just 700 will be very difficult," he said.

Nguyen Duc Bac of Malaysian-owned Gamuda Land said businesses are interested in a project only if costs, deadlines and legal provisions are assured.

The project involves two hidden costs, land compensation and land-use fees, that make it very difficult for businesses to calculate the sums involved, he said.

"If the two cannot be clarified right at the beginning, it will be very difficult for businesses to invest."

If the developer has to negotiate compensation with the residents, it would become "extremely high," he claimed.

The attendees said a survey is needed to accurately determine the resettlement needs of the residents and clarify how the public land portion would be allocated to businesses to safeguard all the parties’ interests.

Khuong Van Muoi, former vice president of the Vietnam Association of Architects, said the land valuation should take into account the underground portions of Ton Duc Thang, Le Loi and Ham Nghi streets, the metro line No.1 station opposite Ben Thanh Market and renovation of September 23 Park, which are in the works.

"There will never be another piece of land near the river, in the center of the city with convenient transportation systems above and below ground like this one."

But he said, to attract investors, the city should consider increasing the construction density and reducing the minimum mandatory living space in the area.

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