The success of real estate projects is determined by land use planning.

DNHN - Mid-construction halts on real estate projects are not only a financial concern for developers and buyers. Consequently, the development of a land use plan is a crucial step in the growth of the real estate industry.

Land use planning assists in determining the optimal land use plan and the allocation of infrastructure, planning, transportation, and environmental impacts for a project. When distributing the project to maximise profits, an efficient land use plan also assists the developer in increasing revenue and absorption rate.

According to Troy Griffiths, Deputy Managing Director of Savills Vietnam, the land use plan creates a detailed and efficient scheme for the allocation of land and resources, thereby promoting the sustainable development of the nation. projects and the real estate market, in general, were discussed. The land use plan ensures the efficiency, minimal environmental impact, and viability of the development by specifying the type of property development, size, stage, price, and sales strategy. Finance and ultimately sustain a prosperous community.

The project failed for the lack of a land utilisation plan.

In the Vietnamese market, it is not uncommon for real estate projects to fail and be abandoned in the middle. The recent Land Use Planning report by Savills Vietnam analysed the significance of land use planning when developing a project. There are numerous reasons for this, as the report explains.

"A land use plan is unsuccessful if it results in the development of products, infrastructure systems, and utilities that do not provide financial, socioeconomic, or environmental benefits. A poor plan will result in the creation of products that do not fit the market, as well as infrastructure and utilities that do not meet the community's needs. Poor land use planning or failure to adhere to the plan can expose stakeholders to substantial financial risk and investment failure, according to Troy Griffiths.

In the South of Hanoi, for instance, an investor has developed a 9,000-unit apartment complex spanning 3,500 m2. However, the business did not adhere to the original plan and instead converted the office and commercial space into apartments, reducing the size of the apartments and significantly increasing their number. These changes place a heavy burden on infrastructure and facilities that are insufficient to accommodate the growing population. This results in numerous conflicts between resident groups and a decline in the project's quality of life.

According to the expert, many projects with good products fail because the plan does not account for the growth of the corresponding infrastructure.

"Even if the project has suitable residential or commercial products, the quality of life is incomplete and inconvenient without roads, drainage, and public utilities. "Leads to uninhabited "ghost" urban areas," he said.

Savills also cites the city of Nha Trang, where many projects have a construction density of up to 70%. The disregard for the city's construction requirements has resulted in a level of development incompatible with Nha Trang's infrastructure and social infrastructure plans.

"Proper land development and planning necessitates the consideration of both favourable and unfavourable scenarios. Specifically, identifying viable sales strategies, product recommendations, and sales stages, thereby minimising the risk of failure and maximising the likelihood of success by taking into account risks. analysis.

Not only are failed real estate projects a financial concern for developers and purchasers, but they can also pose significant resource, ethical, and environmental challenges.

The key to success is meticulous planning

Certainly, the real estate industry in Vietnam has examples of successful comprehensive and optimal land use planning. Ecopark in Hung Yen and Phu My Hung in District 7 (Ho Chi Minh City) are two examples of how product development planning, staging, and sales strategies contribute to project success.

Phu My Hung in City's 7th District. With a size of 433 hectares, Ho Chi Minh City had an "ambitious" beginning with the goal of transforming an empty land into the leading financial, residential, commercial, industrial, and educational centre in the city's southern region.

According to Savills's analysis, the project has a well-defined, 30-year-long phased development plan. The investor has complied with international development standards, including sustainable development, ensured construction by socioeconomic development, and followed all design and construction regulations. build.

Meanwhile, in the North, the Ecopark urban area, which encompasses more than 500 hectares, focuses on constructing a high-quality green lifestyle with an emphasis on education, the economy, and recreation. With their parks, golf courses, schools, hospitals, renewable energy systems, and efficient transportation, urban areas are considered to be a model of sustainable development. The investor has invested in a range of residential and commercial properties, such as apartments, villas, townhouses, and serviced apartments.

The Ecopark project has been implemented in phases, allowing for careful and gradual development planning. The phased approach enables developers to adapt to shifting market demands, incorporate feedback, and guarantee the project's overall success.

Lessons for real estate developers

 Real estate development requires careful planning and execution to ensure the project's financial viability, profitability, and sustainability, as evidenced by the preceding examples.

"Before beginning construction or investment, thorough and careful planning is required. The correct decisions are supported by objective market indicators, developed case studies, and evaluated recommendations. Market analysis is essential for determining the appropriate type and size of development. "Financial viability must also be determined through cash flow projections to determine the most financially viable type of development at the time of its implementation," said Troy Griffiths.

Land use planning is an essential component of real estate development, as it ensures the most efficient use of land. When developing new projects, stakeholders must base their decisions on data and a comprehensive market and population analysis. By collaborating with a seasoned consultant such as Savills, real estate developers can avoid investment risks, maximise returns, and reduce risks.

Nhan Ha Phan