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Lengthy break-even period discourages investment in underground parking lots
The Saigon Times
Saturday,  May 23, 2020,10:17 (GMT+7)

Lengthy break-even period discourages investment in underground parking lots

The Saigon Times

Scooters, motorbikes and cars are parked within the premises of the Trong Dong (Bronze Drum) Music Stage Theater on Cach Mang Thang Tam Street, District 1, HCMC – PHOTO: VNA

HCMC – Authorities in HCMC are finding it hard to attract investors in underground parking lot projects, largely due to the lengthy period of capital recovery.

The municipal government has planned for the construction of several underground parking lots within the city center, but these projects have yet to get off the ground.

One project, which aims to develop the basement of the Le Van Tam Park into a parking lot and public service complex, is awaiting the appraisal of its technical designs.

The investor in an underground parking lot at the Trong Dong (Bronze Drum) Music Stage Theater in District 1 is making adjustments to its basic designs.

Meanwhile, other investors are starting to work on similar projects at Hoa Lu Stadium, Tao Dan Cultural Park and September 23rd Park, all in District 1.

The HCMC Traffic Department noted that underground parking lot projects require large sums from investors.

However, the main stream of revenue is parking fees. Part of the parking lots are zoned for business, service and commercial activities, but their overall profit rates may be low and it may take a long time to break even, according to authorities.

Data revealed that underground parking lots at Le Van Tam Park and Tao Dan Cultural Park are expected to take 31 and 46 years, respectively, to recover their investment costs.

Also, office leasing services in downtown HCMC are subdued, which will have a major impact on the projects’ capital recovery and financial plans.

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