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    Eden a   nguyen thuy linh Eden a nguyen thuy linh Document Transcript

    • EDEN A BUILDINGHO CHI MINH CITY - VIETNAM (Source: www.skyscrapercity.com) Advisor: Pro. Dr. Karl Kluegel Subject: Urban Planning and Real Estate Market Student name: Nguyen Thuy Linh VIETNAMESE – GERMAN University Class: UDP 2010 Ho Chi Minh City – Vietnam – 08/2011
    • Table of contents: I. INTRODUCTION.…………………………………………………………………………………2 II. BUILDING OVERVIEW/DESCRIPTION…...…………………………………………………..3 1. Building overview……………………………………………………………………………….3 2. Building description……...……………………………………………………………………...3 2.1 Location...………………………………………………………………………………..….4 2.2 Building functions......................... …......……………….…….…………….……………...5 2.3 Architecture and Planning characters ……………………………….……………………...6 III. METHODS OF EVALUATION…………………………….……………….…………………….6 IV. EVALUATION………………………………..……………………………………...…………..…7 1. Market analysis......…………………………………………………………………..…..……...7 1.1. Retail market.…………………………………………………………………...…………7 1.2. Hotel market.………………………………………………………...…………………....8 1.3. Parking market.……………………………………………………………………..…….9 2. Location………….…………………………………………………………………………….10 3. Architecture and Planning design…...………………………………………………………...10 4. Parking capacity………………………………………………..……………………………....11 4.1. The demand of the building……………………………………………………………...11 4.2. The supply of the building……………………………………………………………….11 5. Environment friendly…………………………………………………………………………..12 6. The economic feasibility ………………...…………………..………………………..……….12 7. Social impact…………………………………………………………………………………...13 V. CONCLUSION…………………………………………………………………………………….13 REFERENCES……………………………………………………………………………………...………15 1Nguyen Thuy Linh-Eden A Building
    • I. INTRODUCTION: As reported by CBRE(1) in 2011, Ho Chi Minh City is currently having 30 key projects under development, mainly in District 1. Among these 30 key projects, the Eden A is considered as one of the most important projects, which will be the complex function building of 5-star Hotel - Commercial Center – Parking in Ho Chi Minh. Figure 1: Map of the key project’s locations. (Source: Fearless Forecast Report in January 2011, CBRE) Whether this project should be built or not still remains the controversial issue. Some people think that with the current situation of retail or hotel market in Ho Chi Minh City, there should not have one additional commercial building or 5-star hotel like the Eden A project. However, there is also another group of people think that the parking function of this building is one of the reasons why should people implement this project.(1) CB Richard Ellis is Vietnam’s market leader in real estate sales, lettings, research, valuation and property management 2Nguyen Thuy Linh-Eden A Building
    • By focusing on describing and analyzing the needed criteria to evaluate the technical feasibility (location, architecture and planning design, parking capacity, environmental friendly) and economic feasibility (Break Even ROR) of the Eden A building, this short paper will help people to understand the feasibility of this project as well as to provide the reasons for building this project from the view of the investor. II. BUILDING OVERVIEW/DESCRIPTION: 1. Building overview: Project’s name: The Vincom Commercial Center – Hotel – Underground parking (site A); Investor: Vincom Join Stock Company; Location: Eden quadrangular – Ben Nghe Ward - District 1 – Ho Chi Minh City; Legal base: o Document No. 202/SXD/-CPXD dated 12-01-2011 of Ho Chi Minh City Construction Department; o Construction license No. 40/GPXD dated 23-03-2011 of Ho Chi Minh City Construction Department; Project team: o Architectural design: Site Asia; o Interior design: AEDAS Interior LTD; o Construction: DELTA Civil and industrial engineering Company (for construction of the 6 basements); Unicons Construction Company (for construction of 9 floors) o Consulting – Supervising Company: PCM JSC; 2. Building Description: The Eden A project, which is located on site A, is one of two parts of the project “The group of buildings of Commercial Center – Services – Hotel – Office – Luxury Apartment and underground parking”-at District 1 – is under construction and expected to be completed in Q3/2012; while the another part of the project, which is located on site B, have finished and operated since the date 30th April 2010 with the function: Apartment for rent, Shopping Mall, Offices and underground parking. These buildings, both on site A and site B, are invested by Vincom Join Stock Company with the concept is that to combine these two buildings to create a place having a close model of service’s activities such as shopping, entertainment, 3Nguyen Thuy Linh-Eden A Building
    • offices, apartment for rent, hotels, etc. It is predicted that these complex buildings with high standards will be enjoyable places to satisfy people not only domestic but also foreign. Figure 2: Map of site A and site B (Source: Google map) 2.1. Location: This project is located at a quadrangular area named Eden in District 1 of Ho Chi Minh City, which is limited by four famous streets, namely Dong Khoi, Le Thanh Ton, Nguyen Hue and Le Loi and is considered as one of the “golden positions” of the city. With an area of land is about 8,800m², the location associated with the Sai Gon(2) historical thickness of more than 300 years. In addition, this location is also nearby some City important buildings such as City people’s Committee, City Opera-house, 5 stars Rex Hotel and 4 stars Continental Hotel.(2) Sai Gon is an old name of Ho Chi Minh City was call before 2nd July 1976. 4Nguyen Thuy Linh-Eden A Building
    • Figure 3: Map of the Eden project’s location. (Source: Department of Planning and Architecture) 2.2. Building function: This Eden A project is a complex building having three main functions. Firstly, with its function is commercial center, Eden building is an ideal place will bring new shopping experiences and relaxing areas for local people as well as tourists. Secondly, 5-star hotel with 300 rooms is also one of the main functions of this building with international standard services. Finally, underground parking function is considered as a solution in order to help to solve the parking issues of Ho Chi Minh City at the present. No. Function Area (m²) Note 1 Hotel 32,581 Put from level 5 to level 9 2 Commercial Center 23,456 Put from basements No. 3 to level 4. 3 Parking 22,800 Put at basements No. 4, 5, and 6. 4 Technical and others 26,829 5 Total floor area 105,666 Table 1: The Commercial and Service Area 5Nguyen Thuy Linh-Eden A Building
    • 2.3. Architecture and planning characters: With the land plot is about 8,800m², the Eden A building includes 9 floors with about 53,437m² and 6 basements with nearly 52,229m². One remarkable point of this project is there will have tunnels to connect the buildings on site A and site B when this Eden A project have finished. No. Item Information 1 Land area 8,800m² 2 Building Density 75% 3 Floor Area Ratio (FAR) 6 4 Scale of building 6 basements + 9 floors 5 Height of building 36m 6 Gross Floor Area (GFA) 105,666 m² Table 2: Planning Information III. METHODS OF EVALUATION: Since the purpose of this paper is to evaluate the technical and economic feasibility of the Eden A building from the investor’s view, hence the all collected information will focus only on the 7 criteria were chosen and used by all 15 members of class (see table 3) To start with, in the stage of background research, Internet research methods for finding most of information that relevant this Eden A building was used, especially focus on the information which related to 7 defined criteria. Secondly, for qualitative field survey, the method was to go directly to the site of this project to have physical see about the surrounding areas and adjoining landuse, as well as cross-checking the background. Due to the limited time available, no quantitative surveys was used in this research. Thirdly, collected data were analyzed and ranked with 5 different levels from 1 to 5; and finally, the research ended with a clear conclusion from the view of investor. No. Criteria Notes on method Applied 1 Market analysis Current situation of Ho Chi Minh 2 Location Surrounding areas Accessibility, Mobility 3 Architecture and Planning Design Harmony with surrounding buildings 4 Parking capacity Cars 5 Environmental friendly Saving energy 6 The economic feasibility Break Even ROR 7 Social impact Traffic (analyze at 500m radius) Table 3: List of criteria 6Nguyen Thuy Linh-Eden A Building
    • Expected output: 1. Background Research: Overview Government offices General information Internet 2. Qualitative Assessment: Having physical see Go to the site of building Having general information: Go around the surrounding areas of the land-use, market… building Cross-checking background Identifying strong/weak points 3. Data analysis: related to 7 criteria The impact of 7criteria on the project 4. Conclusion: To invest this project or not? Diagram 1: The Research Method IV. EVALUATION: 1. Market analysis in Ho Chi Minh city: 1.1. Retail market: Source: Savills Research & Consultancy 7Nguyen Thuy Linh-Eden A Building
    • (3) According to Savills’s report , about the supply, there are 93 retail centers in the city which providing 630,000m² of retail space. The occupancy of the whole market reached 85%, a decrease of -5 percentage point compared with last quarter. Furthermore, the average rent decreased by -4% compared with Q1/2011. About the demand, retail density is relatively low across 24 districts demonstrating strong potential demand of modern retail formats. For future supply, from 2012 onward, it is predicted that 12,000m² of new supply will be built, and the total supply will double as compared with the year 2010. Source: Savills Research & Consultancy Besides, with the current situation in Ho Chi Minh City, due to the difficult economic situation, tenants in modern retail centers might try to low their costs by seeking other locations or streets front stores, which have more reasonable rents. Besides, the consumer confidence index has decreased and people have a pessimistic view about the economy, which is the negative sign for the retail market. It should be noted that the turnover growth in retail and services in the first five months of the year 2011 was only 6.4% when adjusted for inflation. However, if the economy rehabilitates in the next four quarters, rents in locations of the city center could increase due to the supply sources are limited at here. With these above judgments, for long-term view, the commercial project of Eden A will be a good business, however, it certainly will have some difficulties in the initial stage due to the economic difficulties. 1.2. Hotel market: As reported by CBRE, in 2010, there were many hotel renovations in Ho Chi Minh City, such as Movenpick Hotel, Rex Hotel and Grand Hotel. Even though the occupancy rates went up year of year, there(3) HCMC Retail Briefing Q2-2011; 06/07/2011; published by Savills. 8Nguyen Thuy Linh-Eden A Building
    • was a decrease in room rates due to the increased competition. The new hotels tend to favor 3-star hotel serving business travelers, while almost none of new 4-5 star hotel are being built until 2012. Turn into (4) 2011, according also to CBRE’s report , there are 9 hotels are under construction in District 1 and many new hotel (3-start hotel or higher) serving business travelers are planning to build next year. Also in the past three months, all from 3-star to 5-star hotel worked and accounted for 80% occupancy, rose about 5%, compared with the previous quarter; and 10%, compared with the same period of last year. (5) Base on statistics of Savills , currently, the whole Ho Chi Minh City has about 4,000 hotel rooms having 5-star standard, 2,000 hotel rooms having 4-star standard and 3,500 hotel rooms having 3-start standard. It is predicted that the city supply of hotel rooms will be plentiful in the future. In the period 2011-2012, it is expected that approximately 750 hotel rooms having 5-star standard, 628 hotel rooms having 4-star standard and 170 hotel rooms having 3-star standard will be put in the market for operating. With the current situation and the forecasts of hotel market in Ho Chi Minh City, an additional number of hotel rooms of Eden A building is an issue need have enough consideration. However, there are many factors contributing to the development of hotel business; and with international standard services, the luxury in both of interior and landscape design, and the favorable location, this hotel will satisfy all the demands of customers and politicians. 1.3. Parking market: Firstly, the number of private vehicles in Ho Chi Minh City accounted for one-third of the total amount of Vietnam. In recent years, Ho Chi Minh City has dominated by cars and motorcycles, and its rapid economic development is bringing more cars and monocycles. According to the statistics, in the end of 2008, the whole City had about 371,000 cars and 3.1 million motorcycles (increased 9.5% and 11.9% respectively, compared with the beginning of the year 2008), and in 2009, these number increased sharply to more than 400,000 cars and more than 4.5 million motorcycles. The number of cars and motorcycle are also expected go up in the future. Secondly, at the present day, there is a shortage of parking in Ho Chi Minh City in general and in district 1 in particular. The reason for this is that the City Urban Planning did not have much space for cars parking as well as motorcycles parking. According to City urban planning, Ho Chi Minh City needs about 520ha for cars parking, however, the fact is that the existing cars parking of the City is about 3.3 ha. For solving this(4) HCMC Market View Q2/2011; publishes by CBRE.(5) Savills plc is a global real estate services provider listed on the London Stock Exchange. 9Nguyen Thuy Linh-Eden A Building
    • problem, the City has painted the road, both on roadways and roadsides, with the prescriptive size for each car parking and people will pay fee for parking at these plot. Many roads frequently filled with a lot of cars parking in single file, however, it is still not satisfy the ever-increasing parking demand of people in district 1 in general and in surrounding area of Eden A building in particular; and lead to congestions happen everyday. From these above conditions, one might ask, what should people do under the present circumstances of the city? For answering this question, Eden A building, which will provide a undergrounding parking place serving customers not only for itself but also for the surrounding areas in district 1, will be an ideal solution. 2. Location: Located at the most favorable position in Ho Chi Minh City with four fronts facing directly four main streets namely Dong Khoi, Le Thanh Ton, Nguyen Hue and Le Loi, Eden A is one of buildings having the most convenient traffic condition in the largest city center in Vietnam. Only two minutes from Eden A, tourists and customers can easily take walks to famous points of the city such as Notre Dame Cathedral, City Post office, etc. Additionally, they can go and enjoy city urban landscape with many buildings which were influenced by France architecture like City opera-house, people’s Committee; as well as drop step to the near food streets and enjoy Vietnamese traditional delicious foods. This is considered as the strongest point of this project. 3. Architecture and planning design: The most important factor of this building is it can go along with the surrounding buildings; however, there is nothing special about this building and some architecture features are not suitable. For example, it should be a red roof instead of blue roof in order to fit with the other buildings in this area. One remarkable point of this project is there will have tunnels to connect the buildings on site A and site B at the 3rd, 4th, and 5th basement to create a close model of service’s activities when this Eden A project have finished. To sum up, this is a particularly important project and will eventually be a landmark of the general architecture of City Center – district 1- when it has finished. Overall, this architecture design is in harmony with the surrounding landscape. 10Nguyen Thuy Linh-Eden A Building
    • Figure 4: the perspective of the Eden A building (Source: www.skyscrapercity.com) 4. Parking capacity: 4.1. The demand of the building: According to QCXDVN 1:2008(6): No. Type of building Minimum demand on car parking 1 3-star hotel or higher 1 parking lot for each 4 rooms 2 Commercial Center 1 parking lot for each 100m² used floor Table 4: The minimum number of parking lots There for, in Eden A building, the parking lots will be needed as the table below: No. Item Information The needed parking lot 1 Hotel 5-star hotel with 300 rooms 75 lots 2 Commercial Center 23,456 235 lots 3 Total parking lots 310 lots Table 5: the needed parking lot in Eden A Building 4.2. The supply of the building (assume parking for cars use only): The parking area: 22,800m² The area for car parking after minus corridor area (30%): 22,800m² * 70% = 15,960m²(6) QCXDVN 01:2008/BXD: Vietnam Building Code – Regional and Urban Planning and Rural Residential Planning 11Nguyen Thuy Linh-Eden A Building
    • According to QCXDVN 01:2008, each car parking plot is 25m² the car parking plots of the building: 15,960 / 25m² = 638.4 about 640 car parking plots will be provided. In conclusion, this building will provide an efficient parking area for customers not only of this building but also of the surrounding area in District 1. Therefore, this is a good point of the Eden A building to help Ho Chi Minh City to solve the parking issue which is considered as one of the most difficult tasks of the local government at the current situation. 5. Environmental friendly: This Eden a building will use low-E glass, which save energy and fuel. By using low-E glass, it will help to reduce cost of air conditioning, increase longevity and durability of furniture, equipment, and especially to protect people’s health in this building during hot days. Low-E glass having special coating, can prevent the building from of 10% sunlight intensity, slowly radiate heat, reduce emissivity, slowly absorb heat and slow heat transmission but guarantee enough brightness inside. Not just that, the whole device system of this building is also used advanced technologies of the world about energy saving and environmental protection. Moreover, it also contributes to reduction of greenhouse gas emission, which leads to environmental protection. This is one of outstanding advantages of the project. 6. The economic feasibility assessment (rough estimate): Total development: No. Item Amount (billion VND) Amount (USD) 1 Land cost 2,500 119,047,619 Construction cost and others cost 2 (GFA=105,666m²) 1,480(7) 70,476,190 3 Total project cost 3,980 189,523,810 (1 USD = 21.000VND) Table 6: the total development cost of the Eden A building Gross Rental Revenue at 100% occupation = (1) + (2) + (3): - Hotel: 300 rooms * 118 USD(8)/room/day* 365 days = 12,921,000 (USD) (1) - Commercial Center:(7) According to Project Status_Report for Shareholder’s meeting of Vincom JSC in 01/2011: construction price wasestimated 14million/1m²(8) According to the current hotel market of Ho Chi Minh 12Nguyen Thuy Linh-Eden A Building
    • 23,456m² * 125USD(9)/m²/month* 12months = 35,184,000 (USD) (2) - Parking: 640 cars * 2USD(10)/car/day* 365 days = 467,200 (USD) (3) Conclusion: No. Item Amount (USD) 1 Project cost 189,523,810 2 Gross Rental Revenue at 100% Occupancy 48,572,200 3 - 5% Vacancy Rate 2,428,610 4 - 35% Operating Cost 17,000,270 5 Net Operating Income 29,143,320 6 Break Even ROR 15.4% Table 7: Rough estimate As can be seen form the table 5, the project is economically feasible if investors require ROR ≤ 15.4%, and it generates substantial Development Profit at 15% required ROR: (29,143,320/0.15) – 189,523,810 = 4,764,990 (USD) Profit. 7. Social impacts: It is clear to see that, the implementation of this project will bring many social impacts, both negative and positive. Overall, there are more advantages than disadvantages. On the one hand, bringing many job opportunities to the local people is one of positive impacts of this building. Additionally, with the parking function of the Eden A building, it will help the local government to solve the parking problem of the City. On the other hand, this building also causes some negative effects on society and one thing can be listed is that the concentration of cars and motorcycles in the building can lead to congestions in its surrounding areas, especially at the rush hours. V. CONCLUSION: It can be seen that, the combination of Eden A building and the building on site B will create a complex building with the largest commercial center, the 5-star hotel having a largest number of rooms and the(9) According to the current price of Vincom JSC(10) According to the current price of Vincom JSC 13Nguyen Thuy Linh-Eden A Building
    • largest underground parking in Ho Chi Minh City in the future, which will be the brand of not only Vincom JSC but also Ho Chi Minh City. As the urbanization trend and the living standard of people is increasing in Ho Chi Minh City, the creation of an ideal place to satisfy perfectly the needs of shopping, living, working of the people is a necessary thing. Therefore, the Eden A project as well as the building on site B will attract more people to use their services, which leads to the investor’s sale will have high results. Furthermore, based on the future urban planning of the City as well as the problems Ho Chi Minh City are facing, this building will bring solutions to solve the parking problem of the City as the number of cars and motorcycles is increasingly and has made the offices and commercial centers become scare in parking space; or to meet the need of the city when it is facing a lack of high-grade hotel, especially at the City Center. No. Criteria Ranking Applied 1 2 3 4 5 Good Bad 1 Market analysis 1 2 3 4 5 2 Location 1 2 3 4 5 3 Architecture and Planning design 1 2 3 4 5 4 Parking capacity 1 2 3 4 5 6 Environmental friendly 1 2 3 4 5 7 The feasibility assessment 1 2 3 4 5 8 Social impact 1 2 3 4 5 9 Total Score 15 Table 8: Summary results of the evaluation Eventually, though this business will have some difficulties and challenges at the beginning period, this is a potential investment. 14Nguyen Thuy Linh-Eden A Building
    • REFERENCES: Website: http://vincom.com.vn http://www.cbrevietnam.com http://www.savills.com.vn http://vneconomy.vn http://www.skyscrapercity.com Phan, Tran; (2011); Khung hoang bai dau xe (Parking crisis); http://laodong.com.vn/Tin-Tuc/Khung-hoang- bai-dau-xe/38143 Document: Vincom (2011); Project Status_Report for Shareholder’s meeting; published by Vincom CBRE (2011); HCMC Market View Q2/2011; publishes by CBRE Savills (2011);HCMC Retail Briefing; published by Savills QCXDVN 01:2008/BXD;(2008);Vietnam Building Code – Regional and Urban Planning and Rural Residential Planning; published by Vietnam Ministry of Construction; Hanoi 15Nguyen Thuy Linh-Eden A Building