“Is there still value in Ho Chi Minh city construction for the L&E industry?”
written by Wayne Brown
Returning to Vietnam…
It’s more than 10 years since I last visited the heavily populated Ho Chi Minh City in southern Vietnam. Last week I had the opportunity to return and host a Sales workshop. During my absence, the construction growth has been significant, capped off in 2018, when the city opened the Vincom Landmark 81. This tall skyscraper became the second tallest in the world that year runner up to the 528m China Zun building in Beijing.
According to CTBUH, the city now boasts 16 buildings above 150m, four more still under construction. More details later in this blog.
Growing population but construction slowing…
However, as Ho Chi Minh City with a population of 8.6 million (registered residents or 13 + million in greater city area), nears megacity status (10 million required). It seems construction is slowing, with the government’s attention turning towards infrastructure projects for roads, ports, and rail.
According to government reports, Ho Chi Minh City accounted for about 22 percent of the national GDP and 29 percent of its financial capital in 2018. However, the city accounts for only 0.6 percent of the land area and 10 percent of its population. Multinational and technology companies often choose Ho Chi Minh City when entering Vietnam.
Also, the city houses the best national universities, research facilities, and the largest international airport in the country. As the most developed city countrywide, Ho Chi Minh City has served as the country’s economic focal point.
The government now desperately needs to attract international interest and approximately USD 20 billion funding to support their current major infrastructure plans.
The broader picture of Vietnam…
The unified country Vietnam boasts a population exceeds 95 million. Aside from the largest city (greater Ho Chi Minh City population of more than 13 million and located in the south of the country), there is Hanoi. The country’s capital has the second-largest city with 7.78 million and is located about 1,760 km north of Ho Chi Minh City.
Further lagging Ho Chi Minh City, Hanoi has only nine buildings above 150m, with two still under construction. Of these are two buildings above 300m, making it second in the country’s skyscraper rankings.
The fifth-largest and considerably smaller city is Da Nang – the population is 1.23 million. It is located in the center of the country and sitting on the coastline with its sandy beaches, making it a popular tourist destination.
And then there was the war…
Only two articles ago, we wrote about the small, narrow Korean Peninsula which is divided by North and South. A country divided by war and remains tense under Communism rule in the North versus a democratic government in the South.
Vietnam’s history is perhaps even more coveted with a violent, war-torn history. With a long history of unrest dating back to the 1880’s when first colonized by Spain and France. However, following the Japanese invasion against the French Indochina at the beginning of World War II, in 1941, Ho Chi Minh and communist colleagues establish the League for the Independence of Vietnam. Known as the Viet Minh, the movement aims to resist the French and Japanese occupation of Vietnam.
No peace in sight even after WWII…
By 1945 with Japan’s withdrawal from the country after WWII, Ho Chi Minh declares an independent North Vietnam. After almost ten years of aggression, France was finally humiliated by Viet Minh’s defeat at Dien Bien Phu. This defeat solidified the end of French rule in Indochina.
Following this was one of the darkest times in modern history, with the North Vietnam communist group embroiled in a war against its southern countrymen. The North was supported by communist allies, China and the Soviet Union. At the same time, the south support came from the Americans and their partners. The ensuing war ragged for some 20 years. Escalating around the middle of 1960 and finally concluding on 30 April 1975. The end came with Saigon’s fall (today called Ho Chi Minh City after the northern Leader).
By the end of the war, more than 58,000 Americans and allies had lost their lives. Vietnam would later release estimates that 1.1 million North Vietnamese and Viet Cong fighters died. Up to 250,000 South Vietnamese soldiers, together with more than 2 million civilians, lost their lives on both sides of the war.
Value in Ho Chi Minh city construction for the L&E industry…
From the tables below, you can see the rapid growth in the past decade. Therefore, imagine the significant difference since my earlier visit when the city was truly just at the beginning of its transformation.
|Global Ranking||#61 in the world by no. of 150m+ completed buildings|
|Regional Ranking||#38 in Asia by no. of 150m+ completed buildings|
|Country Ranking||#1 in Vietnam by no. of 150m+ completed buildings|
|First 150m+ Building||Bitexco Financial Tower (2010)|
|1||Vincom Landmark 81||2018||461 m|
|2||Bitexco Financial Tower||2010||263 m|
|3||The One Ho Chi Minh City West Tower||–||240 m|
|4||The One Ho Chi Minh City East Tower||–||218 m|
|5||Vietcombank Tower||2015||206 m|
|6||Saigon Centre 2||2017||194 m|
|7||Vinhomes Central Park Residential Tower 12||2017||185 m|
|8||Vinhomes Central Park Residential Tower 9||2016||184 m|
|9||Vinhomes Central Park Residential Tower 13||2017||180 m|
|10||The Central 2||2016||176 m|
And so to conclude…
With the recent highrise building development, the elevators-escalator market’s estimated size stands around the modest figure of 42,000 units. Additionally, there are some 4000 new units annually.
Our next journey brings us to Thailand as we take some well-earned R&R. But for sure, we’ll be taking the opportunity to snapshots of those spectacular architecturally gifted building tops and enclosures that house some of our industry’s finest products and services.
Until then, stay safe and keep learning!