Controversial land deal dropped

Tan Hoang Minh Group has decided to cancel the controversial purchase of a land lot in the new urban area of Thu Thiem in HCMC which its subsidiary Viet Star Real Estate Investment Co., Ltd. won through an auction with an extremely high bid in December last year.

Tan Hoang Minh chairman and general director Do Anh Dung on January 10 wrote to Party General Secretary Nguyen Phu Trong and leaders of the State and HCMC, saying that the firm would accept all sanctions for its unilateral contract cancellation. Dung added the move was aimed at ensuring the stability of the local real estate market as the auctions of land lots in the Thu Thiem New Urban Area might lead to negative impacts on the market. The firm agreed with Minister of Finance Ho Duc Phoc’s remark that the price of VND2.4 billion per square meter of land in Thu Thiem was abnormally high.

Do Anh Dung explained his decision to buy the land lot at a high price that he wanted to contribute to the city’s recovery after the pandemic and develop an outstanding project in the Thu Thiem Peninsula.

At the auction, Tan Hoang Minh offered the final price for the land lot of 10,060 square meter at VND24.5 trillion, which was higher than the bid by CapitalLand One Financial, a foreign firm, by VND700 billion to win the auction. The winning price was 8.3 times higher than the starting price and was the highest ever in the local market, at VND2.45 billion (US$108,000) per square meter.

Under the prevailing regulations, if Tan Hoang Minh successfully cancels the contract to buy the land lot, it will lose the deposit of nearly VND600 billion.

The auction of the land lot has stirred up multiple controversies, such as driving up the land prices and disturbing the market.