How Planning Underpins Successful Development: Case Study Analysis

The article will explore Viet Nam's urban land use and development..

What is Land Use Planning?

Land use planning is the process of assessing the highest and best use for a piece of land. It looks at the various development phases, products, and infrastructure and how they are likely to perform given the land’s physical characteristics, environmental constraints, surrounding demographics and socioeconomic environment and the needs of the existing and future community. Ultimately, successful land use planning ensures that land is used efficiently, profitably, and sustainably. Sustainability refers to the environment but also how well a development supports its community; a project that is not easy to live, work, and interact in is not sustainable.  

Read more about the principles of land use planning.  

Often, developers and stakeholders participate in poor property economics or a “planning only” approach, which does not dive into the complexities and multifaceted approach necessary to see how a real estate development will perform. Examples of failed or abandoned projects are too prevalent. Only by utilising analysis that combines advanced property economics, demographics, and applied finance can proposed developments be thoroughly scrutinised and reviewed to maximise the possibilities of success.

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Failed Urban Development Projects in Viet Nam

Swathes of failed and abandoned development projects mark the landscape. While the reasons for failure are diverse, these case studies make clear the importance of land use planning. For example, scenario modelling can highlight potential pitfalls and their influence on success, while phasing or development timing recommendations could identify when or if development should occur. Market research and demographic analysis can also clarify a project's long-term feasibility and sustainability by quantifying demand.  

Failed land use planning is when projects develop products, infrastructure, and facilities that are not financially, socioeconomically, or environmentally viable. Poor planning results in products that are inappropriate, a shortage of viable products, or infrastructure and facilities that do not meet the needs of the community. Poor planning or failing to follow planning guidelines exposes stakeholders to great financial risk and even failure.  

In the south of Ha Noi, a developer launched a large apartment project with 9,000 units and 35,000 residents over a land area of 3,500 m2. However, the developer did not follow its original plan and converted offices and commercial spaces into residential apartments, made the apartments smaller, and increased the number of apartments significantly. These changes place significant pressure on the infrastructure, and the amenities are inadequate for the number of residents. This has resulted in conflict between groups of residents and an inferior quality of living.  

Several projects with suitable products have failed because the planning did not account for proper infrastructure development. Even if projects have the appropriate residential or commercial products, quality of life can be poor and inconvenient if there are insufficient roads, sewage systems, and public facilities. This can result in ghost towns that are underutilised.

In Nha Trang, many new developments have exceeded the new coverage ratio. Some have a construction density of as much as 70%. The disregard for the city’s construction requirements means that the development level is incongruent with Nha Trang’s infrastructure and social infrastructure planning.  

Proper development and land planning should consider black swan and blue sky scenarios. It accounts for risks, identifies feasible sales strategies, and recommends products and phasing, which mitigates the risk of failure and maximises the chances of success. Failed real estate developments are a financial worry for developers and buyers, but also present significant resource, ethical, and environmental challenges. 

Successful Urban Development Projects in Viet Nam

There are, of course, successful examples of comprehensive and optimised land use planning in Viet Nam. Phu My Hung in District 7 (HCMC) and Ecopark in Hung Yen both exemplify how planning products, phasing, and sales strategies effectively support successful real estate development.

Read more about mega developments in Viet Nam.

Phu My Hung (PMH) in District 7 (HCMC) is one of Viet Nam’s most successful new urban area developments and is celebrating its 30th anniversary. The 433-ha project was ambitious, turning a swamp into a leading financial, residential, commercial, industrial, and educational hub. Its proximity to the city centre and major transportation routes has also emphasised its appeal.

Phu My Hung’s role in promoting Ho Chi Minh City’s development has aided its success. Its official investment decision states that the new urban area will develop with the city and will strengthen and motivate growth in the south and southeast of HCMC.  

Comprehensive planning is evident, given its coordinated and phased development spanning more than 30 years. It upholds international development standards, including sustainable development, commitments to protecting the master plan and nature and ensuring construction complements socioeconomic development and compliance with all design and building regulations. The first phase commenced in 1993 and focused on urban planning, technical infrastructure development, and schools; each subsequent phase ensured symbiotic infrastructure, urban landscaping, recreational facilities, and residential and commercial development. With a solid base, PMH Increasingly offers high-end residential and commercial properties and is integrating IT frameworks into its operations.  

Ecopark in Hung Yen Province welcomed its first families in 2012 and is set to be home to 110,000 residents by 2030. The township spans more than 500 ha and focuses on elite, eco-living that emphasises education, economics, entertainment and sustainability with parks, golf facilities, schools, hospitals, renewable energy systems, efficient transportation systems, and diverse residential and commercial products, including apartments, villas, townhouses, and serviced apartments.  

Ecopark has been implemented in multiple phases, allowing for a well-planned and gradual development process. The phased approach enables the developers to adapt to changing market demands, incorporate feedback, and ensure the overall success of the project.

Success can be attributed to its emphasis on eco-friendly living and sustainable development practices. The project's incorporation of green spaces, renewable energy solutions, and environmentally conscious design elements resonate with modern urban buyers and occupiers seeking a greener lifestyle.  

According to Savills Spotlight: Hung Yen publication, urbanisation in the province is expected to reach 48% by 2025 (resulting in demand for 138,600 new dwellings) and 60% by 2030, up from 17% in 2022. This increase will spur demand for large development projects like Ecopark, which offer integrated facilities and sound residential options.   Savills Land Use Planning Services

Conclusion

Land use planning underpins sustainable development. Given difficulties in securing funding and the emphasis buyers place on solid development track records, failing to plan properly exposes stakeholders to enormous risk. Development should only be considered after quantifying unknown variables, understanding the current and future market expectations and pressures, and modelling potential risks. How many more failed projects are needed before more developers start implementing efficient land use planning?

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