Vietnam’s bustling Ho Chi Minh City is the country’s largest city, with a population nearly the size of New York City’s. However, luxury real estate offerings comprise only a tiny fraction of the country’s residential development.
But activity is brewing at last.
Some media outlets have reported that the city is “urbanizing exponentially,” and a recent report by Savills Vietnam said new luxury offerings are being supported by growing demand from a high urbanization rate, decreasing household sizes, and increased single living. Add to that a $2.5 billion mass transit rail system, called the Saigon Metro, expected to be running by 2020; and a new urban zone extending the central business district (CBD) along the Saigon River, scheduled for completion by 2025.
The city, still referred to as Saigon and also known as HCMC, is divided into two dozen districts, with the Saigon River winding through its center. And the most prominent and expensive area is District 1, the CBD. While wealthy families often live in other districts, District 1 is still unequivocally the hub for all premium international business amenities, including top hotels, landmark office buildings, and luxury retail.
Dung Duong, senior director at CBRE Vietnam, said luxury real estate accounted for less than 2% of the city’s total housing supply. “The number of luxury condos in the entire city is around 4,200 units,” she said. “It’s a very small market, but the new supply will more than double that. We’ll have 5,000 more luxury units coming online by 2020.”
Sky-high homes come with sky-high prices. An anonymous buyer bought two adjacent apartments in the Hong Kong gated community of Mount Nicholson for a total of HK$1.16 billion—a price that has set the “per square foot” record for Asia https://t.co/KFiWavnZBT pic.twitter.com/DDSzydvvXV
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Real estate prices, too, reflect the limited supply and land bank in District 1. According to CBRE’s “Real Estate Market Insights” report for this year’s third quarter, luxury units are 88% sold and prices have increased 8% year-over-year.
The borders of District 1 follow the city’s waterways along its eastern boundaries: the Nhieu Loc-Thi Nghe Canal to the north, Saigon River to the east, and the Ben Nghe Channel to the south. On the western side, its jigsaw-like borders cut inland down Hai Ba Trung Street, Nguyen Thi Minh Khai Street, and Nguyen Van Cu Street.
Ms. Duong noted the average selling price for existing property is around 97.7 million Vietnamese dong per square meter (US$399 per square foot), but points out prices are expected to rise rapidly, with average projected prices per square meter exceeding 136.3 million dong per square meter ($577 per square foot) in 2019.
(Note: Prices from here on will be in U.S. dollars, not Vietnamese dong.)
According to Neil MacGregor, managing director of Savills HCMC, “Prime luxury product in the pipeline sits between $6,000-$8,000 a square meter ($557-$743 per square foot), and those units will be between 75 and 95 meters (807-1023 square feet) — ” making the average total somewhere between $450,000 and $760,000.
One of the most highly anticipated District 1 developments is the 60-story Vinhomes Golden River complex, located on prime riverside land and slated for completion in 2018. Listed prices range from $3,500-$6,000 per square meter ($325-$557 per square foot), for units ranging from 83-158 square meters (893-1700 square feet).
Expectations are also high for the two-tower high-rise D1MENSION, managed by The Ascott Group, pioneers of international-class serviced residences in Asia. The development boasts a panoramic view of the city’s skyline, with 102 exclusive units—two- to four-bedrooms and penthouses—ranging from 69 to 372 square meters (743 to 4,004 square feet), priced at $5,000 per square meter ($465 per square foot) and up.
In District 1, all luxury offerings are condo units, noted Ms. Duong. Most of the existing luxury developments like The ONE offer two- to four-bedroom apartments, though many of the new units being developed are smaller one- or two-bedrooms.
All luxury condo buildings have full gym amenities, with security and CCTV, Mr. MacGregor added. And in fact, the bar for residential amenities is being raised by the developments in the pipeline. D1MENSION will have a sky infinity pool with glass bottom and rain curtain, sauna and steam bath, as well as a wine and cigar lounge.
The Vinhomes Golden River development is a “city within a city” concept, and will host an international school (K-12), retail, restaurants, a riverside park, a yacht-studded marina, outdoor sports facilities including a golf putting green, and even a historical museum and direct links to the 81-story, 890-foot Landmark 81 tower. Located at the center of a $1.5 billion mixed-use development with hotels, conference facilities, luxury apartments, high-end retail, restaurants, and bars, it will become the highest skyscraper in Vietnam—and the 11th tallest building in the world—upon completion next year.
John S Lander / Getty Images
What makes the neighborhood unique
“It’s the core of the city,” Ms. Duong said.
“Unlike many other cities in the region, including Hanoi, the CBD is still very concentrated around District 1,” Mr. MacGregor said. “There’s very little in the way of business outside this area, so all major office buildings, five-star hotels, higher-end service apartments, and prime retail are all located within District 1—and you’ve got the Saigon River views.”
Ms. Duong noted that all the city’s five-star hotels, including the Intercontinental and renowned The Reverie Saigon on the top floors of the landmark Times Square building, are located in District 1—as are the city’s luxury shopping malls, featuring international brands like Gucci, Louis Vuitton, and Chanel, which have always been popular among wealthy Vietnamese.
“The Takashimaya department store is the anchor at the newest retail center that opened nine months ago, and fast-fashion retailers Zara and H&M have opened their first stores in HCMC as well,” Mr. MacGregor said, adding that when the Saigon Metro begins running in a few years, District 1 will be a hub, with multiple stops and lines converging at its center.
Notable fine-dining options include EON51, boasting a spectacular view from the upper levels of the Carlos Zapata–designed Bitexco Financial Tower; and Xu Restaurant Lounge, known for its upscale nouvelle Vietnamese cuisine and signature cocktails.
There are no schools in the immediate area.
Who lives there
The majority of residents in District 1 are members of the expatriate business community, or wealthy Vietnamese from Hanoi. “The Vietnamese are very entrepreneurial,” Mr. MacGregor said. “Historically they’ve made money in cycles with the property market, but what’s driving the Vietnamese economy and rapid growth today is investment in manufacturing for companies like for Nike and Adidas. And increasingly, there’s [demand] for software development. A lot of online games are developed in Vietnam.”
Ms. Duong added that business people living in District 1 are often the top level of management and the heads of multinational companies. In addition, many foreigners rent luxury condos from wealthy nationals at prices that can run up to $4,000 a month.
District 1 is mainly for business people, but there are some famous Vietnamese celebrities who live in the neighborhood, Mr. MacGregor said. District 1 residents include singers Ngoc Son and Thu Minh; and magician Ngo My Uyen, who graced the cover of Cosmopolitan Magazine’s first edition in Vietnam, and reportedly lives in a sumptuous villa with a living-room ceiling covered in 24-karat gold.
“We’re very positive,” Mr. MacGregor said, noting that many units will be delivered over the next five years, offering everyone from foreign investors to affluent first-time home buyers more unit choices. “There’s very little in the way of luxury residential development in central areas thus far, so we’re very bullish that there is significant pent-up demand,” he said. “Compared to Bangkok, HCMC is a far better value for prime luxury product, and it’s a great deal for buyers based in Hong Kong or Singapore.”
“Vietnam is an emerging market, so the demand for luxury isn’t as high as in other cities in the region, but the land bank in District 1 is becoming more and more limited, and prices will go up given the limited supply,” Ms. Duong said.
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