The land areas in Hanoi which industrial factories will leave after the relocations are always the aiming points of real estate developers, because they deserve the “golden mines” for the developers to dig.

It is really not easy to access the land areas, because everyone understands the benefits the land areas can bring.

To date, Vincom has been considered the most successful investor in developing the golden land areas. After succeeding with Vincom Towers built on the land area which was once the premises of the Tran Hung Dao Mechanical Engineering Factory, Vincom quickly realized the great potentials of similar land areas.

According to Thoi bao Kinh te Vietnam (Vietnam Economic Times), tens of hectares of golden land in Hanoi have been falling into the hands of the companies where Vincom is holding the controlling stakes. These include the two well known projects – Royal City and Times City – build on the places which were the Tool Factory No 1 and the March 8 Textile Factory in the past.

In order to attain the 12 hectare land plot of the Tool Factory No 1, the investor – the Hoang Gia Real Estate Development and Investment, where Vincom is holding the controlling stakes of 51 percent, had to pay a huge sum of money – 1300 billion dong. As such, every square meter of land here cost more than 10 million dong. However, analysts still believe that this was a good price for Hoang Gia, because the profits the investment project can bring would be much higher.

The sum of money that the Nam Hanoi Urban Development Joint Stock Company, where Vincom is also holding controlling stakes (55.95 percent) in order to get the land plot of the March 8 Textile Factory has never been revealed. However, real estate experts believe that it was nearly the same with the money paid by Hoang Gia for the 12 hectare land plot.

In order to implement the Vincom Village project, Vincom has to contribute 51 percent of total capital in the Sai Dong Urban Development and Investment Company. Sources said that Vincom makes the capital contribution in exchange for the right to exploit the large land plot with the area of over 183 hectares. Previously, the land plot was reserved for developing an industrial zone.

Regarding the Royal City project, the land plot that the investor got is large enough to build a complex of 4000 apartments, 200,000 square meters of shopping malls and 300,000 square meters of parking lots.

With the average price of over 40 million dong per square meter for apartments and the right to exploit the shopping malls and parking lots for a long term, it is not difficult to imagine how big the profits the investor would be able to pocket.

The huge profits for Vincom have prompted other real estate developers to follow the way of doing business. This explains why the managers of many industrial factories in the inner city, which have to relocate to the suburb areas, want to develop real estate projects on the land areas themselves, instead of giving the “golden land” to new investors.

Managers of the Sao Vang Rubber Company which owns the 6 hectare land area at No 231 Nguyen Trai Road are also considering the investment plan on the land area. In order to relocate the factory, the company will have to halt the production for 18 months, and it will need 800 billion dong to relocate the factory and set up things at the new factory.

The board of management of the company said that the company has signed an agreement with a partner on how to exploit the land area after the company leaves. The partner, who prefers to stay anonymous, said he accepts to pay 700 billion dong for the land.

Hundreds of factories and production workshops in the inner city of Hanoi have been asked to relocate in order to meet the requirements of the urban development. However, how to develop the golden land fund the factories will leave after the relocation remains a difficult question.

In 2009, the Hanoi People’s Committee announced the plan to relocate 422 industrial workshops which cause pollution. The workshops have the total land used area of 887.7 hectares, 209 of which are located in the inner districts and Son Tay town, mostly on “golden land areas”.

The problem is that many land use purpose transfer projects were wrapped up with the agreements among involved parties and the approval of the city’s authorities. Meanwhile, people believe that the land areas should have been put into auctions in order to find the most suitable investors.

Source: TBKTVN