Will District 4 Become the New District 1?
Ten years ago, if you mentioned you lived in District 4, chances are you would get more than a few raised eyebrows. The small district between District 7 and District 1 was known first and foremost for its gangs and mafia personnel.
For the past two years, this land has become a golden real estate opportunity.
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A Strong Two Years
In late October, Singaporean development company Capitaland closed a US$38.9 million deal to acquire a 14,474m2 site in District 4, where it plans to build an apartment community for mid-end to luxury users, with an average apartment size of 79m2. Capitaland expects the property value to increase to US$177 million.
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Other recent luxury developments include Phu Long’s Rivergate complex, which went online this year, along with Thao Dien JSC’s Masteri Millennium, Novaland’s Icon 56 and Trung Thuy Group’s Lancaster Lincoln on Nguyen Tat Thanh, and Lancaster Residences on Ton That Thuyet.
Pham Ngoc Thien Thanh, Manager of Research & Consulting Services, said, “Our ex-Managing Director, Mark Townsend, talked about District 4’s potential 10 years ago, because of its proximity to District 1, and because of its low land cost.”
Both Thanh and Trang Bui, Head of Markets at Jones Lang Lasalle, have reported good sales for new residential buildings with hefty rental yields. In early December, Tuoi Tre suggested that most buyers were looking to rent the apartments out for a profit, and that tenants were harder to find with the influx of competitive luxury and mid-end options in Districts 1 and 2.
Thanh explained that land costs in District 4 are only 1/4th or 1/5th of comparable land in District 1, an area easily accessible by four vehicular bridges and one pedestrian bridge. It might not technically be the central business district (CBD), but it’s certainly CBD Lite.
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While most of the recent projects here are residential, Trang said that a few key commercial ventures are also appearing. She pointed to the office building e.Town, which will officially open this year, with leasing prices around US$20 to US$24 per square metre, compared to District 1’s US$35 to US$40 for a similar space.
Flooding is still a concern, however. District 4 was named one of the three most flood-prone districts in the city, along with Tan Binh District and Thu Duc District.
Last year, plans were set to spend US$41.8 million to build three large-scale reservoirs in the districts, the District 4 one to cover 4.8 hectares and cost US$2.2 million. #iAMHCMC couldn’t find information about its progress.
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Along with water, current residents have also proved difficult to developers. Buildings must be torn down and residents must be compensated, a slow process in many cases.
As land prices rise, District 4’s old reputation hasn’t completely gone away.
As Trang said, “The concern is still there, to be honest. Especially for large multinational companies—they worry about the safety of their staff because of its reputation. However, I don’t see that much concern from the local buyers with the new developments. They see the vibrant road along the riverside [Ben Van Don], and they see things have changed.”
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