The Hanoi People's Committee has submitted a proposal to the municipal People's Council for approval of the investment policy and selection of an investor for a project to renovate, redevelop and restructure the area surrounding Hoan Kiem Lake, one of the Vietnamese capital's most recognizable landmarks.

The proposal is scheduled for consideration at a special council session on October 28.

The planning area covers approximately 66.82 hectares across Hoan Kiem and Cua Nam wards. The project aims to create a large interconnected public space linking Hoan Kiem Lake with August Revolution Square, the Hanoi Opera House, the Vietnam National Museum of History and surrounding areas.

The city intends to expand public spaces, reorganize traffic and underground infrastructure, preserve and promote heritage values, and introduce appropriate cultural and commercial facilities.

The entire project is expected to be completed in 2029.

Three major investment components

According to the proposal, the redevelopment will comprise three components, each with a different financing and investment structure.

The first component involves land clearance, with preliminary investment estimated at VND 9.924 trillion (approximately $377 million).

This phase will be financed through the municipal budget as a public investment project, with the Hoan Kiem Ward People's Committee expected to serve as the project owner.

The proposed land area covers approximately 30.82 hectares, excluding plots B1.6 and B4.13-HH1, which will be developed under separate projects.

The second component involves constructing an underground shopping center beneath the park and public square east of Hoan Kiem Lake, designated plot B2.5, and the park and square to the north, designated plot B1.3.

The development is planned to have four underground levels and a total floor area of approximately 82,608 square meters, with preliminary investment estimated at VND 4.611 trillion (around $175 million).

Mat Troi Thu Do Real Estate Joint Stock Company has been proposed as the investor under a direct investment arrangement.

The company would be required to contribute at least 20% of the investment from its own equity, equivalent to approximately VND 922 billion ($35 million), while the remaining VND 3.689 trillion ($140 million) would come from other legally mobilized funding sources.

The city estimates that leasing land-use rights for the underground space could generate approximately VND 1.604 trillion ($61 million), providing budget revenue to help finance the third component.

The third component covers construction, renovation and landscape improvements around Hoan Kiem Lake and neighboring areas, with preliminary investment estimated at VND 7.694 trillion (approximately $293 million).

Hanoi proposes implementing this component through a public-private partnership (PPP) under a build-transfer (BT) contract, with Mat Troi Thu Do Real Estate Joint Stock Company serving as the investor.

The investment includes approximately VND 3.518 trillion ($134 million) for new construction in the municipal People's Committee headquarters area, VND 268 billion ($10 million) for renovation of the municipal People's Council headquarters, and VND 3.908 trillion ($149 million) for improvements to the southeastern area of Hoan Kiem Lake.

The investor is expected to contribute at least 15% of the total investment from its own equity, approximately VND 1.154 trillion ($44 million), and raise up to 85%, or approximately VND 6.540 trillion ($249 million), from other legally permitted sources.

To compensate the investor under the BT contract, Hanoi plans to use a combination of land assets, state budget funds and revenue from leasing underground space developed under the second component.

An alternative arrangement would involve payments from the municipal budget using proceeds from auctions of land-use rights and public assets.

The city has identified six potential land holdings covering a combined 7.31 hectares, with an estimated value of VND 4.878 trillion (approximately $185 million).

These include a 0.77-hectare site on Trang Tien Street covering planning plots B4.5-TM1, B4.5-TM2 and B4.5-TM3; a 0.52-hectare site on either side of the post office, covering plots B4.3-TM1 and B4.3-TM2; a 2.29-hectare property at 1-3 Tang Bat Ho Street; a 0.34-hectare site at 5 Le Thanh Tong Street; a 0.09-hectare site at 15 Hai Ba Trung Street; and a 3.30-hectare site in Mai Lam Village, Dong Anh Commune.

According to the municipal People's Committee, these land holdings are only preliminary options for compensating the investor responsible for the third component.

The city may consider allowing the investor to develop projects on the designated sites or auctioning the land-use rights to generate funds for payments under the BT contract.

Thanh Hue