1. VIETNAMESE GERMAN UNIVERSITY
URBAN PLANNING & REAL ESTATE
MARKETS
Class assignment:
GRAND HOTEL EXPANSION
Address: 08 Dong Khoi, Ben Nghe Ward, District 1, Ho Chi Minh City
Advisor: Prof. Dr. Karl Kluegel
Student: Doan Ngoc Anh Vu
Class: UDP2010

2. CONTENTS
I. INTRODUCTION ......................................................................................................................... 3
II. METHODOLOGY .................................................................................................................... 3
III. BUILDING OVERVIEW/DESCRIPTION............................................................................... 4
IV. EVALUATION .......................................................................................................................... 6
1. Design and Image ....................................................................................................................... 6
2. Technical Feasibility .................................................................................................................. 7
3. Traffic......................................................................................................................................... 7
4. Market Analysis ......................................................................................................................... 7
5. Economic Analysis ..................................................................................................................... 8
6. Social impact .............................................................................................................................. 8
7. Environmental friendly.............................................................................................................. 8
V. CONCLUSION .............................................................................................................................. 9
REFERENCES ......................................................................................................................................10
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3. I. INTRODUCTION
Nowadays, Vietnam is one of the development countries that have high speed of the real estate.
However, the average number of tourist come to Ho Chi Minh City is more than 2 million per
year. To satisfy the demand of tourism, competition with the current real estate and increase the
effect of business, in 2010 the Sai Gon Tourist Company made a decision to expand the Grand
Hotel such as: install the restaurant at the top floor (equivalent the 20th floor) with the name of
project is “Grand Hotel expansion”, the existing Grand Hotel was executing up to the 17th floor.
To evaluate the effect of the project, the investor has to do more research about the criteria that
affect directly to their project because this is the big project has many elements impact to the
society as well as the real estate such as: land use, budget, transportation, employment, etc.
II. METHODOLOGY
To evaluation a real estate project exactly is required the knowledge of many fields of vision and
request gather adequate information from many sources such as: Ho Chi Minh City Department
of Architecture, Ho Chi Minh City Department of Construction and some concern institutions
especially from the investor. To be able to finish research, all economic parameter such as
vacancy rate, rental cost, etc. were retrieved from report of market overview Q1/2011 from CB
Richard Ellis Vietnam Company. And every cost to construct building, project period is assumed
as every building which is the same capacity was done.
There are two main parts of assignment; the first one is individual analysis to chosen project
about technical feasibility and economic feasibility, the second one is class analysis. By
collecting fifteen estimating projects, macro economy impacts to Ho Chi Minh City and to
Vietnam are analyzed by creating criteria. The selected criteria to assess all projects are flexible.
Literature reviews, current market reviews for critical comments is mostly used for all criteria.
Field observation is also applied for criteria: Design, Traffic, and Social Impact. For criteria
Parking capacity and economic analysis, the paper uses some technical calculation for
assessment. And finally, each criteria will be ranked from Good to Bad which is represented
from 1 to 5.
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4. III. BUILDING OVERVIEW/DESCRIPTION
Grand Hotel is one of the oldest hotels in Ho Chi Minh City since 1930 and completely restored
in 1997, nestled in Saigon's scene riverside area and within walking distance to major
commercial and entertainment addresses, and still retained its French colonial style, provides a
perfect base for conducting business or for having completely relaxed vacation.
Grand Hotel Saigon will be a five-star hotel in 2011 with 233 rooms categories totally combined
between new and old style, Western and Asian restaurants, conference rooms with capacity of up
to 700 persons, and the best diversified quality services so as to satisfy every single guest.
The Sai Gon Tourist Company got the construction licenses from the Department of
Construction in 2007 (No.59/GPXD issue 30, March, 2007); the Grand Hotel is located on No.
08 Dong Khoi Street, Ben Nghe Ward, District 1, Ho Chi Minh City with 2780m2 and designed
by Archetype Co., Ltd.
The construction includes these items:
• Parking: for 31 cars
• Bed room: 133 rooms
• High: 20 stories (include 1 mezzanine and 19 floors), 2 underground floors, 1 technical
underground floor and 1 technical top floor, the high from ground floor to the peak is
74m.
• Total area slab of floor is 17.764 m2
+ Technical underground floor 376m2
+ Underground floor 1, 2: technical and parking 2x1050m2
+ 1st floor: reception and services 897m2
+ Mezzanine: services 720m2
+ 2nd floor: restaurant and services 867m2
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5. + 3rd floor: restaurant and services 856m2
+ 4th floor: restaurant, services and office management 968m2
+ 5th floor: office for lease, services and office management 646m2
+ 6th floor: bedrooms 766m2
+ 7th, 9th, 11th, 13th, to 19th floor: bedroom 682m2
+ 8th, 10th, 12th, floor: bedroom 686m2
+ Top floor: restaurant 968m2
• The construction density is 85% and follow to the standard of TCVN
According to the forecast, Grand Hotel Saigon will be a five-star hotel in 2011 with 233 rooms
categories totally combined between new and old style, Western and Asian restaurants,
conference rooms with capacity of up to 700 persons, and the best diversified quality services so
as to satisfy every single guest.
Figure: Grand Hotel Expansion
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6. Figure: Location of Grand Hotel
IV. EVALUATION
1. Design and Image
The table A below describes obviously detailed information of land area and design of building.
B. Land use feasibility
Gross building area m2
2,780.00
Open space 897.00 m2
Number of story (available for rent) 20.00 stories
Total area of floor
17,764.00 m2
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7. Parking number 31.00 units
By observation from the outside, the building was built by brick wall with the colonial
architecture. The structure and constructing material is modern tendency to attractive the foreign
visitors. Every room has adequate facilities so most of visitors are also satisfied (from the
statistic opinion of visitors in the internet). The Grand Hotel is located at the Sai Gon riverside so
the visitors can enjoy their sightseeing or walk along the pavement of the river to enjoy the
atmosphere from the river
Score: 2
2. Technical Feasibility
From visual observation and drawings retrieved from the construction company, the building is
designed with 2 technical floors, it definitely serve and supply mechanic and electricity for the
whole building. On the other hand, the elevation of the Grand Hotel stand directly in front of Sai
Gon river so that it is easy to use the wind for ventilation.
On the contrary, the capacity of parking is only for 31 cars but the total room is 233 so the owner
has to extra more parking in the future because it almost certainly lacks of the parking within the
next 5 year. Generally, most of hotel in Ho Chi Minh City are also lack of parking
Score: 3
3. Traffic
The building is placed on two way street in center of Ho Chi Minh City. The name of street is
Dong Khoi and there are high density of traffic and vehicle in this street. However, the wide of
street is only 7 meter with two ways so it is very difficult for car go out from the building to
outside.
Score: 4
4. Market Analysis
According to the situation of current market in Vietnam, the price of gold increases rapidly up to
49.000.000VND per tael in the middle of August so the price of construction materials is also
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8. increase together and it is probably affect to the investors and employment. Moreover, the
interest rate of the banks has gone up to 24% per year so this is the main cause why the investor
can not invest to the real estate projects. In addition, the slow development of business is one of
the main reasons why many companies stop operation and the investors will lose benefit from
the office for lease. Furthermore, the situation is also effect to the tourists coming to Vietnam
and the profit from room for rent at the Grand Hotel goes down.
In generally, more and more construction site is now interruption by plenty of reasons. The
investors have to look around the previous project to learn experience from them before make a
decision to invest this project. In addition, all most of building include hotel and office for lease
has just built only exploit more than 25% capacity so the stock market of real estate in Vietnam
continue go down ( the VN Index is always about from 400 to 475)
Score: 4
5. Economic Analysis
The table B shows theoretically economic calculation about project profit.
B. Economic Feasibility
Construction cost for 1 m2 floor 550.00 USD
Construction cost for 1 m2 basement 800.00 USD
Total Construction Cost 10,389,200.00 USD
Purchase Price for lot 7,000,000.00 USD
Project cost 17,389,200.00 USD
Rental for room 65.00 USD
Gross Rental Revenue
5,452,200.00 USD
at 100% Occupancy for one year
Vacancy Rate 25.00 % 1,336,050.00
Operating cost 40.00 % 2,180,880.00
Net Operating Income 1,908,270.00
Break Even ROR 0.109
Project is economically feasibility if investors require ROR =<0.109%
Project is economically not feasibility at 0.12% since
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9. Score: 3
6. Social impact
When the Grand Hotel executes the work, it will create the large market for employee such as
workers, engineers, etc within 3 years. Furthermore, when the project finish, it will definitely
create more than 200 permanent jobs in this building and a lot of employees work at the offices
for lease.
On the contrary, the negative impact for society now is supplying too many office and hotel to
real estate market will make unbalance in economy. This is over supply while demand is still
lower than the line. This easily leads to rental price or real estate trading price goes down
dramatically.
Score: 3
7. Environmental friendly
According to the project, the designer only focus on the architectural, functional and technical of
the building because most of stories is used for bedrooms and restaurants so the building
probably use more energy for air conditioners, lights, ect.
Score: 4
V. CONCLUSION
This paper is only analyzed some fields concern to the building by seven criteria. The table
below presents the summary results of the analysis.
Mark
No. Criteria 1 2 3 4 5 Score
Good Bad
1 Design & Image X 2
2 Parking Capacity X 3
3 Traffic X 4
4 Market Analysis X 4
5 Economic Analysis X 3
6 Social Impact X 3
7 Environment friendly X 4
TOTAL SCORE 23
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10. In conclusion, The Grand Hotel is one of the oldest and famous hotels in Ho Chi Minh City and
has been known by foreign tourists around over the world. As a result, it has to rebuild to
continue the operation of this famous hotel.
From the period the investor invest to the project “The Grand Hotel Expansion” to finish; it
creates a lot of benefit for society and positive impact Ho Chi Minh City. According to this
project, the investor has to subsidies from the local government and some concern institutions
because of the important range of the project.
On the other hand, the building has to concentrate on the environment friendly by change the
material and structure that was used in the other successful projects.
REFERENCES
Document:
- CBRE Ho Chi Minh City Market View in quarter 2/2011
- The Department of Architecture and Planning
- Townsend, M. (2011) Vietnam Real Estate Update and Market Overview; Indigestion in the
Property Market. April 4, 2011.
- Karl Kluegel (2011), Real Estate Markets and Development handout
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