THU THIEM

THE PUDONG
OF SAIGON
CBRE Global Research

© CBRE Ltd. 2015 1

2 HCMC | Thu Thiem - The Pudong of Saigon
 THU THIEM
Over the past 300 years HCMC has
grown from a small riverbank settlement
into a bustling city
of over eight million inhabitants.
The development of Thu Thiem is now
taking shape to create a new financial
and economic centre for the city.

© CBRE Ltd. 2015 3

 CONTENTS

Executive Summary
05
06 Introduction

09
About Thu Thiem
Location
Land Information
Why Thu Thiem?
Land-Use Plan
Building Height Plan
Land Allocation
Infrastructure

20 Major Approved Projects

22 High-end Condominium
Price Comparison

24
What is holding back
Thu Thiem?
Opportunities
Challenges

26 Pudong Case Study

32 Lessons Learnt
from Pudong

34 Conclusion and References

4 HCMC | Thu Thiem - The Pudong of Saigon

 EXECUTIVE SUMMARY
Located across the Saigon River from District 1 and
possessing a huge land bank of 657 hectares, Thu Thiem is
to be redeveloped as a new centre of HCMC.

Planning for the Thu Thiem New Urban Area began as early
as 1996. However, to date only a tunnel and a bridge have
been completed to connect Thu Thiem to the rest of the city.
Four other bridges and a metro link are still either
under-construction or under planning.

More than 99% of land in the district has already been cleared
with a total compensation cost of about US$800 million.

By the end of 2014, 2,460 of a total of 123,500 resettlement

apartments had been completed and handed over.

In July 2015, the first residential project was launched in Thu

Thiem by local group Dai Quang Minh at a selling price of
US$2,000 to 2,800 per sq. m., marking a new milestone in
the development of the area.

A number of challenges remain for investors, including the lack

of properly developed infrastructure and high land prices.

CBRE GLOBAL RESEARCH

This report was prepared by CBRE Vietnam Research Team, which forms part of CBRE Global Research—a network of preeminent researchers and
consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate.

© CBRE Ltd. 2015 Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not
doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm
independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to
the material are reserved and cannot be reproduced without prior written permission of CBRE.

© CBRE Ltd. 2015 5

 INTRODUCTION
HCMC is set to continue to
expand at a rapid rate and the
development of Thu Thiem will offer
foreign investors myriad opportunities.

T
hu Thiem is a 657 hectare site transformation of Thu Thiem into an
located in District 2, on the international financial and
opposite side of the Saigon commercial centre. When
River from District 1 and the development is complete, Thu Thiem
Central Business District. Even will have a resident population of
though it is relatively close to the 150,000 and a daily working
centre of HCMC, Thu Thiem is population of 220,000. Links to other
largely a Greenfield site and until parts of HCMC will include a tunnel
recently has had little connection (now completed), four road bridges
with the rest of the city. (one already completed), a
pedestrian bridge, a metro link and
Thu Thiem was identified by the HCMC’s existing waterway network.
Vietnamese government as a key
potential development area for a new The first bridge linking Thu Thiem to
Central Business District in 1996. Binh Thanh District opened to traffic
The plan envisages a sustainable, in 2008, but it was not until the
mixed-use project that incorporates opening of the Thu Thiem tunnel in
commercial and residential areas in 2011 that Thu Thiem truly became
addition to schools, offices and open accessible from existing parts of the
public spaces. HCMC downtown area.
US architecture firm Sasaki Work on internal roads within the
Associates was commissioned in Thu Thiem area began in 2014.
2003 to produce a plan for the When complete, these will include a

6 HCMC | Thu Thiem - The Pudong of Saigon

 657- hectares
145,500 - permanent
residents

lakeside road, a riverside road and a and will feature an 86 storey

12 km long flyover. Work is structure, one of the tallest in South
scheduled to finish within the next East Asia, in addition to a high-end
36 months. shopping mall, a 5-star hotel,
offices, serviced apartments and
In July 2015, local developer Dai underground parking.
Quang Minh launched the first
residential project in Thu Thiem at As HCMC continues to expand, the
prices ranging from US$2,000 to development of Thu Thiem will offer
US$2.800 per sq. m., marking a new significant opportunities in
milestone in the development of construction and real estate and as a
Thu Thiem. location for business growth.
However, the pace of development to
The most visible new structure in date has not met expectations,
Thu Thiem will be the part of the mainly due to infrastructure and
14.5 hectare Empire City Project high land prices.
which was recently approved. The
project will be developed by a joint This report examines the
venture between Tien Phuoc JSC., opportunities that Thu Thiem will
Tran Thai Co. Ltd., Denver Power offer as well as the challenges that it
Ltd (UK) and GAW Capital Partners. must overcome in order to establish
It will be located directly opposite itself as the new centre of HCMC.
the existing HCMC downtown area

© CBRE Ltd. 2015 7

8 HCMC | Thu Thiem - The Pudong of Saigon
 ABOUT
THU THIEM
Location
Land Information
Why Thu Thiem?
Land-Use Plan
Building Height Plan
Land Allocation
Infrastructure

© CBRE Ltd. 2015 9

LOCATION
Thu Thiem is situated in District 2 across the
Saigon River from District 1.

DISTRICT 12

HO CHI MINH CITY 1A

GO VAP DISTRICT

0 1 2 5 10 km
TAN SON NHAT
INTERNATIONAL
AIRPORT

TAN BINH
DISTRICT DISTRICT
3

DISTRICT 10
1A

10
DISTRICT 11

National Highway
DISTRICT 6
t
District Boundary n Kie
a
VoV

DISTRICT 8
inh
a nL
V
y en
u
Ng

ssway
Expre
Lu ong
rung
C-T
HCM
HCMC | Thu Thiem - The Pudong of Saigon
 13

1A

THU DUC DISTRICT

DISTRICT 9

BINH THANH h
Trin
DISTRICT Duy
uyen
Ng
est
s t -W y
Ea hwa
Hig DISTRICT 2

DISTRICT THU
1 THIEM

DISTRICT
7
DISTRICT 4
Nguye

Village Road 19
n Huu
Tho

© CBRE Ltd. 2015

 LAND INFORMATION
7,563,750 sq. m.

Source: www.thuthiem.hochiminhcity.gov.vn
TOTAL GFA
(UPPER GROUND)

Thu TOTAL

657 ha 216 ha
TOTAL USABLE
LAND LAND
AREA
Thiem AREA

TOTAL GFA
(UNDERGROUND)

2,220,079 sq. m.

Residential Space Commercial Space Land Efficiency Ratio

3,823,055 3,339,285 3.5

sq. m. sq. m.

Number of Apartment Height Restriction Land Price - Approx. US$

26,618 86 2,500-3,500
units storeys sq. m.

12 HCMC | Thu Thiem - The Pudong of Saigon

WHY THU THIEM?
The development of Thu Thiem offers an
opportunity to connect the eastern bank of the river
with the rest of the city.

T hu Thiem enjoys a strategic location across the Saigon River from District 1
and possesses a large land bank. It is these attributes that prompted city
master planners to identify the area as an ideal location for the development
of a new financial, commercial and residential centre for HCMC.
Thu Thiem also acts as a link between existing areas of the city and new
developments to the east, including the city’s planned new international airport.
The area is ideally located at the southern terminus of National Highway No. 1,
the main road transport link which runs from Hanoi in the North to HCMC in
the South.
Similar to Pudong’s location in Shanghai, Thu Thiem occupies a large
peninsula formed by a meander in the Saigon river. This area on the East
side of the river includes almost 8.5 km of river frontage which is mainly
used for commercial and transportation activity. The river is heavily
polluted in places and the river frontage currently houses a number of
unsightly industrial facilities and storage areas. As Thu Thiem is
developed, this area will be transformed into an important
residential, working and recreational amenity for the city.
The Saigon river is a tidal river characterised by diurnal tides. Thu
Thiem is fully integrated into the hydrological cycle of the river,
acting locally both as a water filter and a receiving area for river
water. While it is accepted that current levels of pollution in the
Saigon River must be addressed at a regional level, it is
believed that the development of Thu Thiem will help create
a new perception of the centre of HCMC as an attractive,
riverfront area. This will help to reinforce the image of
HCMC as a desirable world-class metropolis.
The Pudong model that Thu Thiem attempting to follow
has enjoyed remarkable success over the past decades,
which is encouraging HCMC authorities to accelerate
their plans to develop the area.

© CBRE Ltd. 2015 13

 LAND-USE PLAN 0 100 200 400 m

Thu Thiem NUA’s Border Residential – High-density Urban Service Sites

Central Square’s Border Cultural Sites Central Park
Commercial School Entertainment/Education
Commercial Mixed-use Software Park Paludology
Residential Mixed-use Administration Sites Central Square
Residential – High-density Medical Centre Waterway

Source: Urban Design Guideline by Sasaki Associates (USA)

14 HCMC | Thu Thiem - The Pudong of Saigon

 BUILDING HEIGHT PLAN 0 100 200 400 m

Project Site Boundary

4 Floors (16 m) 25 Floors (100 m)

6 Floors (24 m) 30 Floors (120 m)
10 Floors (40 m) 40 Floors (160 m)
15 Floors (60 m) 50 Floors (200 m)
20 Floors (80 m) 86 Floors (344 m)
Source: Urban Design Guideline by Sasaki Associates (USA)

© CBRE Ltd. 2015 15

 3 4 7
1
6
2a
2b
5
2c

8
(1) See Infrastructure Map page 20-21
(2) Source: http://vietnamnews.vn/economy/263477/
hcm-city-signs-bt-infrastructure-deal.html

16 HCMC | Thu Thiem - The Pudong of Saigon

 LAND ALLOCATION
P lots 1 and 2 in Thu Thiem face the existing city centre (District 1 of HCMC) and have therefore
been identified as the core of the new urban area. These two plots will be developed as the
financial and commercial heart of Thu Thiem and will comprise high-density office towers,
commercial developments and public spaces such as the Central Plaza and the Crescent
Riverfront Park. The main focal point of this area will be the tallest building in HCMC which will serve

7
as an iconic feature of the city’s skyline. There will also be a large square in the centre of this core area
containing indoor and outdoor arenas and recreation spaces.
In June 2015, a consortium of two local firms Tien Phuoc Real Estate JSC and Tran Thai Real Estate
Co. Ltd. and Denver Power Co. Ltd., a member of UK-based Gaw Capital Partners received an
investment certificate to develop Plot 2b worth US$1.2 billion. The 15-ha area, known as the Empire
City Complex, will consist of an 86-storey building, a five-star hotel, a shopping mall and an office
building.
In 2014 South Korean conglomerate Lotte and its Japanese partners (Mitsubishi and Toshiba) received
in-principal approval to develop Plot 2a worth US$2 billion. The Eco Smart City development is expected
to feature luxury trade centres, hotels, office buildings, and apartments on across an area of 10 hectares.
The second main area of Thu Thiem will be the East/West Boulevard consisting of Plots 5 and 6. This
area provides a gateway to Thu Thiem from both District 1 and District 2 and will be home to stations
on the metro line that will run from District 1 to Thu Thiem. Plots 5 and 6 will be reserved for various
types of residential development as well as supporting facilities such as schools, medical centres and
parks. Building height in this area will range from three to sixteen storeys.
Under an agreement with Thu Thiem Authority, the whole land area of these two plots is to be given to
Dai Quang Minh Real Estate Investment JSC, a local company, in exchange for it investing in
infrastructure systems in Thu Thiem including building four major roads, the Thu Thiem 2 Bridge and
a pedestrian bridge.(1)
The company plans to develop an 80-hectare residential area near the southern section of the Mai Chi
Tho Road (the existing main road that runs from Thu Thiem Tunnel through the site to District 2), and
a 20-hectare area with 11 plots of land near the northern section of the road. According to the plan, the
company will also build another urban area near a 150-hectare southern ecological forest area on the
peninsula, including 234 villas, 395 houses, 5,600 luxury apartments, a five-star hotel and a hospital. (2)
In early Q3 2015, the first 414 Sarimi apartments and 178 Saroma villas of Sala Thu Thiem are
under-construction and have been launched for sale. The developer is also planning to launch the next
condominium blocks named Sarica and Sadora. This is also the only project that is currently
under-construction in Thu Thiem.

The “Core Area” of Thu Thiem is Neighbourhood #7 includes the

divided into two neighbourhoods Eastern Residential development,
known as #1 and #2 (2a, 2b, 2c) Urban Resort Hotel and Marina

The Northern residential area Neighbourhood #8

consists of neighbourhoods encompasses the entire
#3 and #4 Southern Delta area

The residential areas along the

Mai Chi Tho Boulevard are shown
as #5 and #6 respectively

© CBRE Ltd. 2015 17

 THU THIEM’S DEVELOPMENT TIMELINE

Planning for Relocation of existing

Thu Thiem begins residents officially begins

1996 2002

INFRASTRUCTURE East-West
Highway
Connects Thu Thiem
to residential and
commercial districts
to the east

THU THIEM 1 BRIDGE

Linking Thu Thiem with Binh
Thanh Dist.
Authority
Opened in 2008

THU THIEM 2 BRIDGE

Linking Thu Thiem with District 1 (at one end of PEDESTRIAN BRIDGE
Ton Duc Thang Str.) Linking Thu Thiem with District 1
Investor: Dai Quang Minh (at Me Linh Square)
Under-construction, set to open in 2018 Investor: Dai Quang Minh
Under Design and Concept Contest

18 HCMC | Thu Thiem - The Pudong of Saigon

 Launch of the first
1/2000 master plan by residential project
Work on Thu
architecture firm Sasaki in Thu Thiem by
Thu Thiem 1 Thu Thiem Tunnel Thiem 2 Bridge
Associates unveiled Dai Quang Minh
Bridge opened opened begins

2008 2011 2012 2/2015 7/2015

Source: http://www.thuthiem.hochiminhcity.gov.vn
FOUR MAJOR ROADS
Total length: 11.9km
Investor: Dai Quang Minh and
Vietnam Infrastructure Development THU THIEM 4 BRIDGE
and Finance Investment JSC. (VIDIFI) Linking Thu Thiem with
Construction started in 2014, to be District 7
completed in 2017 Under-planning

THU THIEM 3 BRIDGE

Linking Thu Thiem with
District 4
Under-planning

THU THIEM TUNNEL

Linking Thu Thiem with District 1
Investor: Thu Thiem Authority
Opened in 2011
© CBRE Ltd. 2015 19
 Plot 1 + 3
Section 1-3 and 3-5: Trung Thuy Group
MAJOR APPRO
got approval to study development and
design plan for a 1,16 ha site
Section 1-15 and 3-3, 3-7, 3-1: GS
E&C got approval to carry out investment
plan for a 4 ha site

3
1
Plot 2a: Thu Thiem EcoSmart City
2a
5
Mixed-use
Status: In-principal approval in 2014
Developer: Lotte, Mitsubishi, Toshiba
Area: 10 ha | GFA: 730,000 sq. m.
2b
Total investment cost: US$2.2 billion
2c

Plot 8
Plot 2b: Empire City Project Eco-forest Park
Mixed-use including 86-storey landmark building Status: In-principal approval
Status: In-principal approved, construction to start Developer: Dai Quang Minh
at the end of 2015 Parcel Area: 17.9 ha
Developer: JV Tien Phuoc – Tran Thai – Gaw Gross floor area (GFA): 60,000 m2
Capital Partner Floor area ratio (FAR): 0.34
Area: 14.5 ha| GFA: 730,000 sq. m. Height: 4 stories
Total investment cost: US$1.2 billion Commercial ratio: 100%

20 HCMC | Thu Thiem - The Pudong of Saigon

OVED PROJECTS Plot 7
Marina Complex (Parcel 7-2)
Status: Sult Marina Development Pte Ltd.
(Singapore) and Sai Gon Yacht Corp
have registered for development but no
activity yet
Total area: 5.4 ha
Gross floor area (GFA): 5.000 sq. m.
Floor area ratio (FAR): 0.14

4 7
Height: 6 stories
Commercial ratio: 100%

6
5
Plot 5 + 6
Mixed-use

8 Status: In-principal approval, residential

component construction started in 2013,
launched in Jul 2015
Developer: Dai Quang Minh
Area: ~100 ha
GFA: 730,000 sq.m.
Total investment cost: US$2.2 billion

© CBRE Ltd. 2015 21

 Go Vap
District

Binh Thanh
District

Phu Nhuan
VINHOMES CENTRAL PARK
District Q4/14 launched price: US$2,122 (full finishes)
Q3/15 price: US$2,200 – $2,510 for Park 1, Park 6
~US$4,000 for Landmark 81
Unit size: 50 – 108 sq. m.
Total units: 10,000 NEW PORT

VAN THANH
HIGH-END CONDOMINIUM
PRICE COMPARISON

District 3 BA SON

SARIMI (SALA THU THIEM)

OPERA HOUSE Developed by Dai Quang Minh
Q3/15 launched price: US$2,000 - $2,800

District CBD (full finishes)

Unit size: 82 - 123 sq. m.
Total units: 414

10 BEN THANH
ICON 56
Q1/14 launched price : US$ 2,910 (bareshell)

Thu Thiem
Q3/15 price: US$3,210
Unit size: 47-112 sq. m. gross area
Total units: 328

District 1 THE TRESOR

Q4/14 launched price: US$2,900 (bareshell)
Q3/15 price: US$2,720
Unit size: 57-114 sq. m.
Total units: 498

THE GOLDVIEW
Q3/15 launched price: US$1,650-2,050
(basic finishes)
RIVERGATE District 4
Q4/14 launched price US$2,660 (bareshell)
Unit size: 45-123 sq. m.
Q3/15 price : US$2,610
Total units: 1,846
Unit size: 56-114 sq. m.
Total units: 276
Source: CBRE Research, Q2 2015.

22 HCMC | Thu Thiem - The Pudong of Saigon

 Xi RIVERVIEW PALACE
Q4/08 launch price: US$2,150 (full furnishes)
Q3/15 price: US$2,350 - $2,650 PHUOC LONG
Unit size: 138 - 195sqm
Total units: 270

Scale
GATEWAY THAO DIEN
Q2/15 launched price: US$1,800 (full finishes)
Q3/15 price: US$1,996-2,115
2km
MASTERI THAO DIEN
Unit size: 45 - 136 sq. m.
Q4/14 launched price: US$1,520 Total units: 439
(basic finishes)
Q3/15 price: US$1,770
Unit size: 45 - 87 sq. m. RACH CHIEC METRO LINE 1
Total units: 3,025

METRO STATION

AN PHU
MAJOR HIGH-END
ESTELLA HEIGHTS CONDOMINIUM
Launched price: US$1,900 (full finishes)
THAO DIEN Q3/15 price : US$2,130 for 89 sq. m.
Unit size: 80 - 135 sq. m.
Total units: 824

THE SUN AVENUE

Launched price: US$1,480 (basic finishes)
Q3/15 price: US$1,650
Unit size: 67 - 87 sq. m.
Total units: 3,000

District 2

VISTA VERDE
Launched price: US$1,680 (basic finishes)
Q3/15 price: US$1,700
Unit size: 45 - 177 sq. m.
Total units: 1,152

Handover Conditions Bathroom suites Kitchen cabinet Air-conditioner Wardrobe

Basic finishes Y N N N

Full finishes Y Y Y Y/N

Prices are quoted exclusive of 10% VAT and 2% maintenance fee

© CBRE Ltd. 2015 23

 For HCMC to expand in all directions,
the success of the Thu Thiem New Urban
Area project is vital.

24 HCMC | Thu Thiem - The Pudong of Saigon

 WHAT IS HOLDING BACK THU THIEM?
Management mechanism: The major focus of development in Thu
The developer of Thu Thiem is a Thiem is on office and commercial real
state-owned company (Thu Thiem estate. However, a sizable volume of
Investment and Construction Authority) commercial supply already exists on the
which does not have the absolute West of the Saigon River on more or less
authority to make quick decisions on the the same scale. Additional development
project’s overall vision, budget and currently underway on the West side of
staffing. All decisions have to be the river (the existing CBD) will make Thu
approved by the city government, which Thiem even more unattractive to
often takes a considerable time. investors. The total GFA of
newly-approved projects on the West side
Policies and incentives to attract investors including Tan Cang, Ba Son and Khanh
to Thu Thiem in the next 10-15 years Hoi is 4.9 million sq. m., marginally less
remain very limited. than the 5.1 million sq. m. planned for
Lack of synchronous infrastructure. The the core area of Thu Thiem (zone 1, 2, 3
four main streets of this area are still under and 4). Assuming net absorption
construction and will only be completed in continues at levels recorded in Q2 2015
the next 1-2 years. (an increases 1.4% q-o-q) it will take 12
years to absorb the total supply provided
Land prices are high. Investment costs in by these three sites on the West side.
Thu Thiem new residential area are
significant at an average of over US$3,000
per sq. m. In addition, the city does not
offer credit for land leasing and requires
investors to pay for it immediately.

OPPORTUNITIES CHALLENGES

Strategic location Slow progress of infrastructure development

Cleared site provides a very large High land prices
land bank
Current lack of demand for space in HCMC,
Masterplan in place especially from the financial services sector
Lack of big land bank Lack of strong command and control
in the existing CBD
Slow pace of activity to date
HCMC set to become a global megacity
Fractured ownership and speculative investment
Limited tax powers and levers
Local, regional and global competition

© CBRE Ltd. 2015 25

 CASE STUDY: PUDONG

BACKGROUND
As
recently as the early 1990s, the
Pudong area of Shanghai was
mainly farmland. Commercial
development in the area was
limited to a few warehouses and wharfs on the
riverfront. In 1990 the Central Committee of
the Communist Party of China (CCCPC) and
the State Council announced plans to re-devel-
op Pudong, a move which ushered in the rapid
development of the area.

26 HCMC | Thu Thiem - The Pudong of Saigon

2013

25 years later, Pudong has become a thriv- Shanghai Stock Exchange as well as many of
ing commercial and financial centre of Shanghai’s most notable buildings includ-
Shanghai and stands as a symbol of Shang- ing the Oriental Pearl Tower, the Jin Mao
hai’s modernisation and the reform and Tower, the Shanghai World Financial Center
opening up of China. Pudong has attracted and China’s tallest structure, the 632 m tall
many of the world’s largest financial firms Shanghai Tower Properties in Pudong now
to establish a presence and is also a popular achieve higher rental levels compared to the
residential area for some of China’s most historic Puxi area on the opposite side of
wealthy people. The area is also home to the river.
Lujiazui Finance and Trade Zone and the

© CBRE Ltd. 2015 27

 Incentives for Pudong
In order to support the development of Pudong authorities introduced a number of incentives
to encourage development. These included:

1990: Tax deductions, exemptions and “One-stop” approval procedures introduced

other incentives for infrastructure for foreign-invested projects.
investment.
Reform of local administration to a
1992: Pudong permitted to issue stocks and simplified two-level structure. The
bonds to attract investment. Government of Pudong has authority
equivalent to that of a sub-provincial
2002: Gold and diamond exchanges moved
Chinese city, half a level above the authority
from downtown Puxi to Pudong.
given to Shanghai’s other districts.
2005: Foreign banks allowed to do business
Introduction of a Special Economic Zone
in local currency.
strategy. Pudong was granted status as a
Projects in Pudong given status as Pilot Free Trade Zone allowing a series of
“National Priority Projects”. projects which are subject to lower levels of
Allocation of Pudong annual Government regulation.
loans of US$90 million.

Development Timeline
for the core of Pudong New Area - Lujiazui Financial District

1994 1999
Oriental Pearl Tower Jinmao Tower
Height: 468 m Height: 420 m

BEGINNING PHASE HINDER

1990 - 1997 1997 - 2001

Area established Effected by 1997 financial crisis,

Attract several financial institute in development delayed
China, including CBC ICBC, Developing municipal facilities
Shanghai Stock Exchange Market
Cooperate with CHIA TAI, Mori
Building Co.

600,000 sq. m. 1,750,000 sq. m.

Mainly Office Mainly office, exhibition centre and
retail developed

28 HCMC | Thu Thiem - The Pudong of Saigon

Pudong: 25-Year Summary Statistics -1990 vs.2014
6 711

RMB

RMB
Gross Domestic Product billion billion

1 290
RMB

RMB
Fiscal revenue
billion billion

229 308 143

Multinational Companies named in Headquarters of
headquarters the Fortune Global 500 local companies.

2015
Shanghai Tower
Height: 632 m
2002 2008
Bocom Financial Towers Shanghai World Financial Center
Height: 230 m Height: 492 m

ACCELERATE BOOMING

2001 - 2008 2008 - Now

2002, Super Brand Mall opened Core area fully developed,

(a large-scale shopping center) 2007 start expansion to east areas.
Office/residential/tourism all Improve supporting services for financial
developing 229 multinational headquarters,
308 companies named in the Fortune Global 500
and 143 headquarters of local companies

3,000,000 sq. m. 3,500,000 sq. m.

Continued office construction, but Continued office construction, but
increasing residential and retail increasing residential and retail
Source: CBRE Research, Q1 2015.

© CBRE Ltd. 2015 29

Suhe Creek OCT
RMB 150,000 sq. m.

Residential
Residential properties in Lujiazui
riverside achieve higher level in the
price spectrum compared to the
historic Puxi area on the opposite
side of the river.
Tomson Riviera
RMB180,000 sq. m.

The Bound Of Bund

RMB 120,000 sq. m.

30 HCMC | Thu Thiem - The Pudong of Saigon

 ONE CITY,
TWO SCENARIOS
Office
Pudong rents grew faster than Puxi

12.0

10.4
10.0

8.4
Rent: RMB / sq.m. /day

8.0

6.0

4.0

2.0

Shanghai Arch 0
RMB150,000 sq. m.
Q1 99

Q1 00

Q1 01

Q1 02

Q1 03

Q1 04

Q1 05

Q1 06

Q1 07

Q1 08

Q1 09

Q1 10

Q1 11

Q1 12

Q1 13

Q1 14

Q1 15

Puxi Pudong

Buoyant demand from the financial sector and tight supply to

make Pudong an overwhelmingly landlord market;
The rental gap between Pudong and Puxi stood at a 10-year high of
23% as of Q1 2015.
Source: CBRE Research, Q1 2015.

© CBRE Ltd. 2015 31

 LESSONS LEARNT
FROM PUDONG

P
udong shares a number of similarities
with Thu Thiem in terms of its
geographical location, a connecting river
tunnel and the same ambitious vision of
creating a new central business district
overlooking the existing one across the river. Key
factors behind the success of Pudong, which
Thu Thiem would do well to learn from, include
the following:
The Central Government empowered local
authorities in Shanghai and Pudong with many
privileges and selective intervention. The
government of Pudong possesses authority
equivalent to that of a sub-provincial Chinese
city, half a level above the authority given to
Shanghai’s other districts.
The development plan of Pudong was
considered a national-level goal (Projects in
Pudong were bestowed the status of “National
Priority Projects”). However, this emphasis is
lacking at Thu Thiem, which is considered to be
a development project in HCMC, an not a major
project of national importance. The Chinese

32 HCMC | Thu Thiem - The Pudong of Saigon

 The success of Pudong has been driven by a
number of key factors, which Thu Thiem would
do well to learn from.

Central Government actively promoted therefore the area has not

Pudong on the world stage to raise global achieved the status of an engine for
finance for the development of its economic and financial
infrastructure at a very early stage and also development.
provided support during the Asian
Financial Crisis. Pudong possessed an effective
masterplan. Landmark buildings in
The Central Government also introduced a Pudong are clustered around the exit of the
Special Economic Zone strategy, with tunnel linking the area with the historic city
Pudong the only area to be granted the centre and reflect the real market value of
status of a Pilot Free Trade Zone. This this strategic location. In Thu Thiem, this
privileged SEZ status led to the introduction area is reserved for sites of lower plot ratio,
of comprehensive reforms including tax which is not capitalising on its true
deductions, exemptions and other potential. Pudong has also converted port
incentives for infrastructure investment; warehouses and wharfs on its riverfront into
Pudong permitted to issue of stocks and public areas such as green parks, shopping
bonds; gold and diamond exchanges moved areas and promenades, creating a social hub
from downtown Puxi to Pudong; and for the area. In Thu Thiem, the recent
“one-stop” approval procedures introduced conversion of port and shipyard facilities
for foreign-invested projects. These into a large township development on the
innovations have not yet been adopted in West bank (or the existing central business
Thu Thiem. Other key economic zones district of HCMC) has negatively affected the
around Vietnam have been bestowed with attractiveness of Thu Thiem and
similar incentives as Thu Thiem and discouraged relocation over the river.

© CBRE Ltd. 2015 33

 CONCLUSION
T hu Thiem has the potential to generate
far-reaching improvements to life in Ho Chi Minh
City and bolster the city’s image and standing on the
world stage. However, CBRE believes that radical new policies
are required if the government’s vision of creating a “Pudong of
Saigon” is to become a reality. The project must be accorded the
status of a national priority and requires stronger support from the
central government. Authorities should introduce special privileges
and incentives to attract more investors to the area. In addition, the
local government of Thu Thiem should be given special status by the
central government to allow it to operate more effectively and enact
policies which will assist and encourage the development of the area. If this
is done, local and central governments will be able work together to
encourage potential investors by introducing incentives such as tax deductions
or exemptions.
It is vital that the investment procedure for potential foreign investors is made
clearer and simpler. The introduction of a “one stop” approval procedure for foreign
invested projects will remove much of the uncertainty that could be inhibiting
investment; minimise speculation and prevent land prices from becoming prohibitively
high. Other suggested measures include limiting approvals for projects on the West bank
of the Saigon River as these may deflect potential investment away from Thu Thiem.
The implementation of the measures outlined above will ensure Thu Thiem will stand out as
the single most attractive focus for potential investment in Ho Chi Minh City and will support
its development as the city’s new economic and financial centre.

REFERENCES
Official Website of Thu Thiem New Urban Area (http://www.thuthiem.hochiminhcity.gov.vn/)

Official Website of Pudong New Area Government (http://english.pudong.gov.cn/)

Howard Dawber, 2014. Canary Wharf: Lessons for Thu Thiem

Ngo Viet Nam Son, 2012. Thu Thiem New Face First Phase, Published on The Saigon Times on Jan 22, 2012.

Sasaki Associates, 2012. Thu Thiem 1/2000 Master Plan Adjustment

Yawei Chen, 2007. Shanghai Pudong: Urban Development in an Era of Global-local Interaction.

34 HCMC | Thu Thiem - The Pudong of Saigon

35
For more information about this regional major report, please contact
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