Mixed-Use Development
Mixed-Use Development:
Residential, Commercial
Data Sheet
Dong Van Cong Street, District 2,
Thanh My...
Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 1
Table of Contents
1 Executive Summary...................
Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 2
1 Executive Summary
This land plot is a 11,497 m2 mix...
Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 3
2 Property Details
2.1 Location
The site is located o...
Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 4
2.1.1 Site Area
The project consists of 2 land parcel...
Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 5
3 Financials
3.1 Valuation Framework
We have valued t...
Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 6
3.3 Feasibility and Valuation
3.3.1 Findings
Given ou...
Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 7
Investment Services
Colliers International is a world...
Upcoming SlideShare
Loading in …5
×

Colliers Vietnam Investment Memo for Land for Development in HCMC D2

585 views
437 views

Published on

Investment Memo for Land Plot in HCMC D2 on Dong Van Cong street near An Phu and Thu Thiem. 11,497 sqm site cleared and ready.

Published in: Real Estate, Education, Travel
0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
585
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
34
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide

Colliers Vietnam Investment Memo for Land for Development in HCMC D2

  1. 1. Mixed-Use Development Mixed-Use Development: Residential, Commercial Data Sheet Dong Van Cong Street, District 2, Thanh My Loi Ward, Ho Chi Minh City, Vietnam March 2014 PREPARED BY: Peter Dinning General Director KyNam Doan Investment Manager Colliers International Ho Chi Minh City CBD (6.5km, 10 mins) An Phu (2km, 5 mins) Thu Thiem (3km, 5 mins) Land Plot
  2. 2. Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 1 Table of Contents 1 Executive Summary.........................................................................................2 2 Property Details...............................................................................................3 2.1 Location.....................................................................................................3 2.1.1 Site Area .........................................................................................4 2.1.2 Accessibility/Transportation...........................................................4 2.1.3 Recreation, Amenities and Services ...............................................4 2.2 Details .......................................................................................................4 3 Financials.........................................................................................................5 3.1 Valuation Framework ...............................................................................5 3.2 Construction Schedule..............................................................................5 3.3 Feasibility and Valuation...........................................................................6 3.3.1 Findings...........................................................................................6 3.3.2 Assumptions...................................................................................6 4 Contact ............................................................................................................6
  3. 3. Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 2 1 Executive Summary This land plot is a 11,497 m2 mixed-use development site located off the East-West highway in District 2, Ho Chi Minh City. This site is strategically located 10 minutes drive, or 6.5 km, east of the CBD where the future development of HCMC is planned. It is located less than 3km east of Thu Thiem new urban area and 2km south of An Phu urban area. The lease is currently long-term, but would be converted to a 50-year lease term. Offer: 100% sale at US$826/sqm. At 11,497 sqm, the total sale price is US$9,500,000. An Phu (2km, 5 mins) Thu Thiem (3km, 5mins) CBD, Dist 1 (6.5km, 10mins) Dist 7
  4. 4. Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 3 2 Property Details 2.1 Location The site is located on Dong Van Cong street, 50m Southeast of the East-West highway (Mai Chi Tho), which is the main thoroughfare into District 1 via the Saigon tunnel. It is also located 6.5km east of the CBD of Ho Chi Minh City, 3 km east of Thu Thiem, and 2km south of An Phu. It takes approximately 10-12 minutes to drive to District 1 and the CBD from site location and 5 minutes to An Phu area where the highly touted Cantavil, Estella, and Vista apartments and shopping centers are located. The Thu Thiem New Urban Area has begun development last year after years of site clearance of the nearly 7 square km area between the CBD and the project site. The road construction project, scheduled for completion in 2016, will completely connect all eight functional zones and include a six-lane primary avenue, a two-lane road that runs along the Saigon River, and a four-lane river-side road. In addition, Vingroup gained approval in July to develop the finance center in Thu Thiem that will cover 250,000 sqm. Development in the Thu Thiem New Urban Area and further development of the An Phu Urban Area will position this project site as a prime location just off the 6km span of East-West Highway that connects the two major urban areas. Other residential projects within 2km include Diamond Island (>$1,500/sqm), Cantavil Premier ($1,600/sqm), Vista ($1,500/sqm), Imperia An Phu ($1,400/sqm), and Lexington Residences ($1,100/sqm, 2016). CBD (6.5km, 10 mins) AN PHU (2km, 5 mins) Thu Thiem (3km, 5 mins)
  5. 5. Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 4 2.1.1 Site Area The project consists of 2 land parcels with an area of lot 1 – 367.3 sqm and lot 2 – 11,129.7 sqm. The land parcels are separated by Dong Van Cong Street. The development is proposed in lot 2. Trapezoidal in shape, the terrain is undulating and 1.0m below the existing approach road. Lot 1 Area is not considered for Development as the Plot size is small and irregular. Current land boundaries: South West – Dong Van Cong Street North West – Small canal (about 10-15 m wide) North East – Existing residential dwellings South East – Existing residential dwellings 2.1.2 Accessibility/Transportation There are two primary routes connecting the property with the CBD in HCMC. The first is the Mai Chi Tho road, located 0.5km to the northwest. This road leads directly into District 1 via the Saigon Tunnel. The second is the Hanoi Highway, located 2km north of the property. This is a main entry access to HCMC via the Binh Thanh District. 2.1.3 Recreation, Amenities and Services Modern retail areas within 2.5km include The Cantavil Premier Mall and Vista Walk where you can find Parkson, Big C, Metro, Lotte Cinemas, and a variety of F&B options. The property is located near two international schools - 0.5km south of ACG International School Vietnam and 3km south of International School Ho Chi Minh City (ISHCMC). There are also four middle schools within 2km of the property. There is one hospital in District 2, and it is located 1km east of the property. 2.2 Details Site Info Total Site Area 11,497 sqm Tenure Long Term Approved Planning Type Mixed-use residential and commercial FAR 7.0 (5.5- for residential, 1.5+ for commercial) Permitted GFA 81,896 (77,907 for lot 2) sqm Site Coverage 30%-40% Floor Limit 18-24 Height Limit 85.08 m
  6. 6. Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 5 3 Financials 3.1 Valuation Framework We have valued the property using the Discounted Cash Flow Approach of each of the business verticals separately – retail, office, and apartments for sale. Discounted Cash Flow (DCF) Approach. The explicit DCF approach is used to estimate the Market Value of projects where cash flows can reasonably be projected, and to compare the performance of alternative investments by evaluating their Internal Rate of Return. Guidance Note 7 of the RICS Global Valuation Standards sets out the principles in detail. 3.2 Construction Schedule Year 1 2 3 4 Quarter 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Infrastructure Build-up Area of Parking/Basement Retail Office Residential Service Area/Swimming Pool
  7. 7. Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 6 3.3 Feasibility and Valuation 3.3.1 Findings Given our assumptions and forecasts on inflation, escalation, lending rate, risk- free yield, market positioning, future supply and demand, and other pertinent variables, we have arrived at an IRR of 30.47% based on our determination of best use of land given the present investment certificate issued on 11/11/2008 and a land price of US$ 826/sqm. Land Cost: $9,500,000 (826 * 11,497) Construction Cost:S $45,719,966 *All values in US$ To determine feasibility, we calculate three primary indicators: Internal Rate of Return (IRR), Return on Equity (ROE), and Return on Capital (ROC). These feasibility indicators will vary to an extent, depending on variables such as investor access to and cost of capital, degree of leverage, and product positioning in the marketplace. 3.3.2 Assumptions Discount Rate 12% (10-year note: 9%) VND Lending Rate 9% Gearing 50% Residential Sales $1,200/sqm Commercial Rent $15/sqm 4 Contact Please refer enquiries pertaining to this document or property to: Peter Dinning General Director Mob: (+84) 903 322 344 Email: peter.dinning@colliers.com KyNam Doan Investment Manager Mob: (+84) 122 312 8032 Email: kynam.doan@colliers.com IRR: 30.47% ROE: 43% ROC: 20%
  8. 8. Land Plot for Mixed-Use D2 HCMC, Vietnam | Investment Memorandum | 7 Investment Services Colliers International is a world leader in connecting capital with real estate investment opportunities. We provide breadth and depth of services to both international and local investors, developers, and landowners. Colliers Vietnam is committed to helping our clients make informed decisions - whether it's through investing, divesting, or holding - to increase the value of their portfolios and achieve target liquidity, risk, and returns. We manage a portfolio of opportunities that offer strong returns along a spectrum of well- understood levels of risk. This portfolio includes bare land, distressed developments, and income- producing properties across all market sectors: commercial, industrial, residential, and retail. Backed by an outstanding track record, wealth of knowledge and strong regional presence, our team is able to deliver the following services: Acquisitions > Identify & secure opportunities to help you achieve your portfolio targets > Assist/Conduct negotiation of letter of intent through to settlement of contract > Conduct Market and Financial Due Diligence as well as advise on best use of land Dispositions > Execute marketing of asset through our strong network of relationships with institutional investors, banks, developers and high net worth individuals in Vietnam and throughout the Asia Pacific > Conduct initial due diligence of interested parties prior to negotiation > Assist/Conduct negotiation through to completion of divestment Colliers International Ho Chi Minh City Bitexco Building, 7th Floor 19-25 Nguyen Hue Street District 1, HCMC, Vietnam T: (+84) 8 3827 5665 F:(+84) 8 3827 5667 Hanoi Capital Tower, 10th Floor 109 Tran Hung Dao Street, Hoan Kiem District, Hanoi, Vietnam T: (+84) 4 3941 3277 F: (+84) 4 3941 3278 Accelerating success This document has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and/or its licensor(s).©2013. All rights reserved. www.colliers.com/vietnam Colliers International

×