Thu Duc City - The Quintessential City
Thủ Đức is a municipal city (sub-city) under the administration of Ho Chi Minh City, Vietnam
On December 2020, Thu Duc City was officially established with the merger of 3 districts: 2,9 and Thu Duc. With a scale of over 20 thousand square hectares and a population of more than 1 million people, Thu Duc City is envisioned to become Ho Chi Minh City's technology, finance and service leader, hoping to contribute around 30% of total GDP of the city. After the merger, Thu Duc City will be situated between two important rivers, the Saigon River and Dong Nai River, as well as adjacent to Dong Nai and Binh Duong, a strategic location that will create momentum for future development.
The ‘city within a city’ model or ‘integrated real estate’ has been mentioned a lot in JLL’s previous reports. This concept refers to projects of the size of a neighborhood or urban area, where multiple mixed functions are integrated such as housing, office, retail, education, entertainment, and other utilities. These projects aim to provide an ideal living space where residents can comfortably live, work and play. The model usually consists of many multi-function buildings interconnected in a harmonious architecture and living environment.
Paul Fisher, Country Head of JLL Vietnam commented: “Thu Duc city will be the destination for projects pursuing the integrated model, as large land banks are still available, with a much lower population density than other areas of Ho Chi Minh City.”
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Just like HCMC’s overall residential market, all projects in Thu Duc City have been well-received. The demand is supported by the growing economy of Vietnam, and by buyers who either have cash-on-hand or the ability to leverage. According to JLL Vietnam report, as of 3Q20, more than 90% of the total supply was taken up by buyers. Also, in terms of price growth, the area has outperformed overall HCMC, in both apartment and landed properties over the years.
The city accounts for 30% of HCMC’s total residential units launched, whereas it comprises only 10% of the city’s total area and 12% of the total population. While Luxury and Premium projects tended to be located in those wards in District 2 that are near to District 1 (the current CBD), lower segment and landed projects (RBL) were located further to District 9 where large land bank remains available.
The chairman of the HCM City People’s Committee announced that the new Thu Duc City is set to become the country’s largest interactive innovation hub. In the first development phase, the government has noted that some of its key developments include: 1) Thu Thiem NUA - the financial technology centre, 2) Rach Chiec National Sports Complex, 3) High-tech park - the automated production centre, 4) National Universities area - the information technology education centre, 5) Tam Da-Long Phuoc ecological and technology centre and 6) Truong Tho center.
The new city is set to become a high-tech creative urban area, with the expectation of attracting a high intellectual workforce. The goal is not too far-fetched, as right now, Thu Duc City has an outstanding foundation for creative development, specializing in science and higher education. The city has a pretty good transport system, connecting with two other cities, Bien Hoa City in Dong Nai and Thu Dau Mot City in Binh Duong, and with Metro Line 1 under construction, the new city is expected to be a magnet to attract high quality labor.
The most prominent is the nucleus of Thu Thiem urban area with increasingly completed infrastructure, gradually transforming into a financial center as planned. The Ho Chi Minh City National University cluster in district 9 currently has more than 10 member schools which are training tens of thousands of students each year, alongside with many domestic and international universities also located in this area. The high-tech park also in district 9 is home to many global technology 'giants' modern factories and production facilities with the investment capital of billions of dollars.
Alongside great potentials are great challenges. News of the city establishment has pushed housing prices up, creating opportunities for price manipulation and hoarding. Without containment, these activities would hinder the development of the new city, causing difficulties for project developers to find a suitable land bank, and create high financial hurdles for potential residents with real housing needs.
Transportation is also a pressing concern. The public transport system in Thu Duc city, connecting to other districts is still incomplete, with only a few bus routes between them. While waiting for large-capacity public transport such as the metro, the city needs to develop more public bus routes, especially focusing on connecting residential areas to subway stations in the future. In addition, it is promising to look into enhancing the water taxi services, a new type of public transportation that .
“In recent years, the real estate sector worldwide is stepping up its response to climate change and sustainable development. As Thu Duc City is taking shape, it is crucial that investors, occupiers and real estate companies share the responsibilities to support and drive sustainable development for a smart and modern future city,” Paul Fisher said.
With developers and buyers starting to take advantage of this new opportunity, JLL strongly believe that Thu Duc City will be one of the main investment hotspots in HCMC in the coming years.