A lot of real estate developers have “made incantations” to turn their projects into completely new projects to save the situation. Analysts have commented that if the property market keeps gloomy for a long time more, it would witness a growing tendency of changing the use of the real estate products.
Hospitals, hotels arising in the places reserved for apartments
In late 2011, local newspapers reported the dispute between clients and the investor of the apartment project in Binh Chanh district of HCM City – Company No 584. The clients, who paid money for the apartments, felt hungry when hearing that they might not get the apartments, because the HCM City authorities agreed to turn the apartment project into a hospital.
Changing the functions of buildings is now an odd business at all. Prior to that, people whispered in each others’ ears that an apartment bloc on Hanoi Highway suddenly changed into classrooms and lecture halls.
Most recently, the information about the high end apartment project Kenton Residences, located on Nguyen Huu Tho road in Phuoc Kien commune of Nha Be district, has caught the special attention from the public.
Though the project is located on an advantageous position, the amount of apartments sold remains modest, while there are 1640 apartments on sale. Therefore, Vu Anh Tam, General Director of Tai Nguyen Company, the investor of the project, has decided to reserve a part of the project land on the riverside area to develop a five star hotel.
Meanwhile, the “death declaration” has been made for many apartment projects, so that the developers can re-design the projects, turn them into houses or villas to sell for money.
The developer of a project in district 9 once sought the permission from the city’s authorities to build 2000 apartments. However, he has changed the plan, deciding to sell landed property instead of building apartments for sale. He said that it would be more profitable to sell apartments instead of landed property, if the market’s liquidity is good. However, in the current conditions, it would be safer to sell landed property.
Flexible policies needed
The changes in the functions of the buildings can also be seen in the city’s central area. The city’s authorities, in an effort to help real estate developers overcome the current big difficulties, have allowed to change the use of some projects.
Therefore, office buildings and hotels have turned into apartments for sale or lease, or the apartments for lease have turned into the apartments for sale. This aims to help developers to continue implementing their projects to take back the investment capital to pay bank debts.
According to Tran Chi Dung, Director of the HCM City Planning and Architecture Department, he has received the proposals to change the initial functions of 10 projects. Meanwhile, the list of such projects will still lengthen.
The developers of some apartment projects in districts 2, 8, Thu Duc and Binh Chanh are also attempting to build houses and villas instead of apartments.
An official of the HCM City Planning and Architecture Department, said that reducing the number of storeys of the projects is a solution for now, when the real estate market keeps lackluster. Therefore, the local authorities should apply flexible policies and approve the investors’ proposals. For example, the city could allow cutting some stories at the projects located far from the center. Meanwhile, multistoried buildings must be set up in the central areas.
Source: NLD
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