Binh Duong high-rise apartment project raises capital without construction permit

A trade, office and high-rise apartment complex project of Pi Group in Binh Duong province, which borders Ho Chi Minh City, has received sales deposits although it has no construction permit or permission to open for sale.

The project, commercially known as Picity Sky Park, is invested by Kim Son Land, with Ecoe Vietnam JSC as the distributor.

Located in the front of National Highway 1A in An Binh ward, Di An town, Picity Sky Park has a planned area of about 10,616 square meters and a construction density of 52.91%. It is designed to have three blocks; two with 40 floors and one with 21 floors, providing the market with 1,568 units that will include 1,319 apartments, 226 officetels and 23 shophouses.

The floor areas range from 55 to 80 square meters for apartments, 100-130 square meters for shophouses and 35-45 square meters for officetels. The apartments, with an estimated price of VND40 million ($1,660) per square meter, are expected to be delivered in the fourth quarter of 2026.

This project only had its investment policy approved by the provincial People's Committee in 2022 and its 1/500 detailed planning passed in June 2023. Although it has no construction permit or permission to open for sale, Picity Sky Park has been noisily advertised and the distributor has received deposits of VND20 million ($829) for each apartment and VND50 million ($2,078) for each shophouse.

A broker from Ecoe Vietnam advertised a price of VND40 million per square meter for "the best project on Pham Van Dong road" that guarantees profits for investors but also a place to live for people with real needs.

“Customers can make a profit of up to 100% of their total investment within two years if they buy apartments,” he said.

Asked about the legality of the project, the broker added that the project will officially open for sale in September, with a construction permit expected to be granted at the end of this year.

In the first phase, the project will offer about 500 apartments for sale, he said, adding that the number of deposits had reached 300.

However, a Pi Group communications representative told The Investor that at this time, the project is not for sale or accepting deposits from customers. The distribution unit, Ecoe Vietnam, is not associated with the firm.

To control the "hot" development of the real estate market, the provincial Department of Construction has announced a list of projects eligible for sale on its portal so that customers can verify the legality of the projects. However, as of July 31, 2023, the list of 105 projects eligible for the sale of future-formed houses did not include Picity Sky Park.

The department is inspecting the project, a source familiar with the matter told The Investor.

Huynh Pham Tuan Anh, deputy director of the department, said that to be eligible for sale, a real estate or apartment project must go through many steps, starting from obtaining the investment policy, 1/500 detailed planning, design approval, and a construction permit. Next the developer implements construction work and after construction is finished, it will be inspected. Finally, to be sold, a permit from a competent authority is required.

Recently in Binh Duong, a number of investors have deliberately raised capital from projects that do not meet these conditions and many people have bought them, leading to complaints and lawsuits.

"Many real estate businesses use the form of business cooperation contracts to circumvent the law. Any form of collecting money from customers with a payment schedule is regarded as illegal capital mobilization and will be sanctioned," stressed Tuan Anh.