The District 2 neighborhood boasts prestigious schools and excellent investment opportunities, just 15 minutes by car from Saigon’s CBD
Vietnam’s biggest and busiest metropolis, Ho Chi Minh City, is currently the symbol of the country’s economic growth.
And if property prospectors are correct, the erstwhile capital of the independent republic of Vietnam that is commonly known by its name under French colonial rule, Saigon, is poised for a brilliant future too.
Over the past five years, investors and developers have set their sights on the city, transforming the skyline of its 24 districts with an ever-growing number of mixed-use glass and steel skyscrapers, and it consistently ranks on top-10 lists of Asian cities in which to invest in real estate.
Construction has centered around District 1, home to commerce, finance and business. However, an increasing number of affluent residents are settling outside of the CBD.
Districts 2, 7 and 9 are popular, with the former anecdotally preferred by Westerners and the latter two by Asian buyers from China, Hong Kong and South Korea, who still make up the majority of overseas investors, according to Ms. Sunny Hoang Ha, associate director of international residential sales at Savills Vietnam.
In particular, the Thao Dien area of District 2 is becoming increasingly sought after, Ms. Hoang said, and is famed for its high-end restaurants, bars, schools and community feel, something that can be difficult to come by in this vast metropolitan area of 12 million.
Thao Dien is bordered to the west, north and along most of its eastern edge by a sweeping meander of the Saigon River. To the south, it is defined by the Xo Lo Ha Noi highway, until it meets Vo Truong Tuan, which marks the area’s eastern boundary.
According to a recent PropertyGuru report, prices in Ho Chi Minh City are the country’s highest, averaging $115 million Vietnamese dong (US$5,000) per square meter for prime real estate.
Ms. Hoang notes that prices are still relatively low in Thao Dien, with higher-end properties priced around VND$69 million to VND$92 million (US$3,000 to US$4,000) per square meter. New developments, including d’Edge Thao Dien, a building from Singapore-based real estate company CapitaLand, have been selling well. A 60-square-meter one-bedroom unit in d’Edge starts from VND4.8 billion (US$208,940), while a 144-square-meter three-bedroom condo in the same development goes for VND11.5 billion (US$500,586).
At the top end of the scale, a contemporary, energy-efficient four-bedroom, four-bathroom detached villa with private swimming pool, parking for two cars and security can go for VND$58 billion (US$2.5 million), according to CBRE Vietnam.
Thao Dien is home to a number of properties for which Vietnamese architects—who are gaining regional, if not international, recognition for their sustainable practices and contemporary, minimalist aesthetic—have become known, infusing the area with a unique aesthetic integrity.
These new-building individual homes are going up to replace many of the older housing units that were destroyed as a result of flooding.
These new developments present the most investment opportunities for buyers. Among the projects near completion or under construction, d’Edge Thao Dien, The Nassim, Gateway Thao Dien and Empire City lead the luxury segment, offering “resort style living”—from one- to four-bedroom units with some duplexes and penthouses—complete with modern conveniences, such as gym facilities and 24-hour security.
What Makes it Unique
Once a sleepy, suburban backwater, Thao Dien is now considered Ho Chi Minh City’s coolest neighborhood. Ancient banyans and narrow, tree-lined laneways can still be found throughout the district, endowing it with a laid-back charm that it has maintained, despite the city’s emphasis on development.
Thao Dien’s enviable location off the Xo Lo Na Ha Noi highway gives the neighborhood excellent accessibility, linking it to the CBD in about 15 minutes by car, while it is just a 10- minute drive to the Thu Thiem New Urban Area, a conglomeration of skyscrapers designed to replace District 1 as the city’s center.
The area will also be served by its own station when Ho Chi Minh City’s first metro line opens, which is expected to be next year, although it has already faced significant delays. This will run from Ben Thanh Market, in the center of the city, to Suoi Tien.
Thao Dien, and District 2 more broadly, are served by some of the best schools in the city for kids from preschool to 12th grade, including the European International School Ho Chi Minh City, the Australian International School, British International School Ho Chi Minh City and the International School Ho Chi Minh City. Additionally, The Saigon International University is located in Thao Dien.
The neighborhood boasts prime retail experiences, including high-end shopping malls Vincom Thao Dien, Thao Dien Pearl and Parkson Cantavil, which feature luxury fashion brands, movie theaters and skating rinks, as well as a growing number of galleries and Annam Gourmet Market, a beloved high-end supermarket catering to international tastes.
Gourmands will also appreciate Thao Dien’s thriving coffee culture and excellent drinking and dining options, which satiate a trendy, young professional crowd, many of whom make the short journey from District 1 and beyond to enjoy what the upmarket but understated area has to offer. Lubu, for one, offers fine Mediterranean cuisine, and Mekong Merchant is popular for its relaxed cafe fare.
Who Lives There
Formerly the refuge of journalists and foreign correspondents, who appreciated the tranquility, Ms. Hoang notes that today Thao Dien is the playground of affluent expatriate and Vietnamese families, attracted by the educational offerings in the community. Of the overseas inhabitants, the majority hail from the U.S., Canada, Australia and Britain.
According to Ms. Hoang, the outlook is very positive for potential buyers, owing to strong rental, investment and development markets.
Indeed, in a November 2017 report published by PwC and Urban Land Institute, Ho Chi Minh City was identified as one of Asia’s top three cities likely to see rental growth in 2018, “reflecting confidence that economic strength will spill over to property values.”
“A good macro-economy has supported positive domestic growth and FDI
continues strongly,” said Troy Griffiths, deputy managing director Savills Vietnam. “It’s been a very healthy start to 2018.”
Overall, he said, rates of return on Vietnamese property are higher than in neighboring countries. “Rental yields across most asset classes are reasonable and with capital gain factored in, total returns are competitively high,” he said. Plus, with Vietnamese real estate widely being seen as a less risky investment, foreign capital is coming in, he said.