A view of the Thủ Thiêm new urban area in HCM City’s Thủ Đức City. Photo vietnam-briefing.com

HCM CITY — Property developer Tân Hoàng Minh Group has decided not to go ahead with its purchase of a 10,060sq.m land lot in the Thủ Thiêm new urban area at a whopping VNĐ2.45 billion (US$108,000) per square metre, the bid for which it won last month.

It will lose its deposit of more than VNĐ588 billion ($26 million) if it fails to proceed with the deal.

On December 10, the Việt Star Real Estate Investment Co., Ltd, a subsidiary of Tân Hoàng Minh Group won the bid to buy the land lot at VNĐ24.5 trillion ($1.08 billion) beating off a bid by CapitalLand One Financial, a foreign developer.

The winning price was 8.3 times higher than the reserve price and the highest ever paid for a square metre of land anywhere in the country.

The company said in a release: “After winning the bid, the group heard a lot of public comments that such a high bid price could lead to negative consequences for the real estate market.”

It said it plans to ask the HCM City Centre for Land Fund Development and the HCM City Property Auction Service Centre for unilateral termination of the contract.

“The group will accept all penalties for its unilateral contract cancellation in accordance with the law on public property auctions.”

On January 10, Đỗ Anh Dũng, chairman of Tân Hoàng Minh Group sent a letter to Party General Secretary Nguyễn Phú Trọng and other top leaders about its intention to cancel the contract.

He claimed his company decided to pay such a high price because he did not want a foreign developer to buy the land.

The 657ha Thủ Thiêm new urban area on the Thủ Thiêm peninsula in Thủ Đức City is set to be developed into an international financial hub. — VNS