Investing in Hospital Construction in Ho Chi Minh City: Opportunities and Challenges

Ho Chi Minh City, with a population exceeding 9 million and a high population density, faces an urgent need for quality healthcare facilities. Investing in hospital construction not only meets the healthcare demands of the population but also contributes to enhancing the overall quality of life.

1. Importance of the Project

2. Planning and Construction Standards

According to Decision No. 3621/QĐ-BKHCN 2012, district hospitals are required to meet specific standards regarding scale and construction area. For instance, district hospitals must have a minimum of 200 beds and a construction area of no less than 10,000 m².

Additionally, the city has approved the "Investment in the construction of 5 central and final-level hospitals in Ho Chi Minh City" to improve healthcare service quality.

3. Legal Procedures and Permits

Hospital construction projects must comply with legal regulations and obtain necessary permits. Under the Construction Law 2014, all construction works must have a permit issued by the competent authority, except in cases where exemptions apply.

Furthermore, to operate legally, hospitals need to obtain an operational license from the Department of Health, which includes submitting documents such as:

Application for an operational license.

Investment certificate or land use rights certificate.

List of personnel and professional certificates.

Reports on facilities and medical equipment.

4. Investment Benefits and Opportunities

Investing in healthcare, particularly hospital construction, offers several benefits:

Stable Profits: The healthcare sector has high and sustainable demand, ensuring stable revenue streams.

Government Support: Socialized hospital projects may receive tax exemptions, such as exemption from registration fees.

Enhanced Reputation: Investing in healthcare enhances the investor's reputation and social responsibility.

5. Challenges and Solutions

However, hospital construction projects also face challenges:

High Initial Investment: The initial investment for infrastructure and medical equipment is substantial

Lengthy Approval Processes: Legal procedures and permit issuance can be time-consuming.

Conduct Thorough Market Research: Understand the needs and trends of the healthcare market.

Select Suitable Locations: Choose construction sites that are convenient for the population and easily accessible.

Ensure Service Quality: Invest in a qualified workforce and modern medical equipment.

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Industrial park land

Vietnam has young and abundant human resources, cheap labor costs, and increasingly improved human resources are the factors that attract many large companies and corporations to set up factories here. The number of young Vietnamese workers who know Chinese, Japanese and Korean is increasing, meeting the job demands of companies. Thus, compared to investment in countries such as Thailand and Indonesia, investing in Vietnam will help the business save a large number of costs for personnel.

Vietnam is in a period of industrialization and modernization. Therefore, the industrial sector is also prioritized for development. The system of infrastructure and utilities is increasingly focused on investment, upgrading, and enhancing regional connectivity to help the process of transporting raw materials and goods to the consumer market quickly and conveniently. In addition, the fact that Vietnam joins the Free Trade Agreement (FTA) has opened up many opportunities for the development of the industrial real estate market. Through this Agreement, a series of tariffs have been eliminated, and investment licensing procedures have been streamlined, which has brought great effectiveness in attracting foreign investment, helping businesses easily make decisions to place factories in Vietnam. Vietnam also has more opportunities to exchange science and technology with developed countries, thereby transforming from exporting low-value goods to exporting higher-value goods.

Land for school construction

More than a year since Decree 86/2018 stipulating foreign cooperation and investment in the field of education took effect, foreign direct investment (FDI) in the education sector has reached 97 million USD, up to October 2019. Experts say that having a large investment capital in this field will create many opportunities for the educational real estate segment to develop stronger in the future.

The trend of urbanization will continue to spread at a high speed, therefore developing national education will become a top priority to improve workforce skills and increase work productivity. At the same time, with a population of over 94 million people and a young population structure, Vietnam has many advantages to develop the education sector.

In HCMC, there are currently over 50 international schools. These schools not only teach children of foreign families living and working in Vietnam but also Vietnamese families who want their children to study at international certification institutions. Previously, most international schools in HCMC received many applications from Vietnamese students, however, due to the State’s regulations, the number of domestic students attending these schools is limited.

Land for investment on high-rise building

On December 31, 2020, Vice Chairman of HCMC People's Committee Le Hoa Binh signed Decision No. 4834/QD-UBND approving the Project "Building a housing development program in HCMC for the period of 2021 - 2030". According to this scheme, the target of commercial housing development in the period of 2021 – 2030, is expected to develop 45.2 million m² of the floor; in which, from 2021 to 2025, it is expected to develop 19.7 million m² of floor space and from 2026 to 2030 is 25.5 million m² of floor space.

One of the key perspectives in the housing development of HCMC is to transform the housing model from low-rise to modern high-rise housing, mainly for efficient land use, creating a land fund for traffic development, parks, parking spaces, etc., provided that technical and social infrastructure is ensured; increase the proportion of apartment houses in new housing construction investment projects.

HCMC will give priority to the development of investment projects to build new houses, high-rise apartments along major public transport axes (such as metro line No. 1 in Thu Duc City), or areas with the planned implementation of the corresponding technical infrastructure system in 6 developed urban districts including District 7, 12, Binh Tan and Thu Duc City.

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Unlike resort real estate, real estate associated with resort tourism is a concept that is extended to more product lines, diverse in both ownership forms and business exploitation capabilities. At the same time, a prerequisite is that the property must be in a quality tourism ecosystem.

If resort real estate defaults to only accommodation products, real estate associated with resort tourism is a new concept. Accordingly, resort real estate is mainly a product line of investment and exploitation of accommodation services. Real estate associated with resort tourism expands to residential urban products (villas, townhouses, apartments) and commercial real estate services (townhouses) developed based on resort tourism.

According to Mr. Nguyen Van Dinh – Deputy General Secretary of the Vietnam Real Estate Association, at present, the trend of the world is to develop tourism systems in the form of scale, which means that the larger it is, the more attractive it is to tourists. With many functions, it will best meet the diverse needs of tourists who are increasingly fastidious and always require high quality.

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