Lotte Group has notified authorities in Ho Chi Minh City of its plan to withdraw from a long-delayed US$900 million real estate development once billed by the South Korean chaebol as a symbol of its expansion in Vietnam.

Lotte Properties HCMC – the subsidiary overseeing the complex in the southern metropolis – has submitted a document to the city’s finance department announcing the termination of the Lotte Eco Smart City project in the Thu Thiem New Urban Area.

However, city officials note that Lotte’s legal status as the project’s investor remains intact until the company completes formal termination procedures under Vietnam’s Investment Law 2020.

The project was launched on September 2 2022, Vietnam’s National Day, in a groundbreaking ceremony attended by senior city leaders and Lotte Group chairman Shin Dong-bin. At the time, Shin highlighted the venture as both a celebration of 30 years of diplomatic ties between Vietnam and South Korea and the cornerstone of Lotte’s planned investment expansion in Vietnam.

Designed to reflect Vietnam’s natural wonders, such as Ha Long Bay and terraced rice fields, the 50,000-square-metre complex was to feature a shopping mall, five-star hotel, office towers, serviced apartments and residential blocks. Its ambitious blueprint included five underground floors and 60 above-ground levels, incorporating smart technology for sustainability and energy efficiency.

Regulatory issues stall progress

Despite the fanfare, construction has not gained traction over the past three years. Regulatory issues and unresolved financial obligations have been cited as key causes of the Lotte Eco Smart City project’s delay.

Lotte Properties HCMC sent a document to the city’s administration in late 2024 listing regulatory issues it was facing, including land use fees. As a result, the city established a special task force this March, led by the mayor, to resolve regulatory bottlenecks hindering property projects, with a focus on addressing issues like land use fees and slow compensation processes.

In June 2025, city officials finalized the land-use fee for the Lotte project at more than 16,190 billion dong ( over US$614 million ), nearly eight years after Lotte first signed an agreement with the city in 2017 to develop the project.

Analysts have also pointed to rising construction costs during the prolonged delay as an additional burden.

Even as the Thu Thiem project falters, Lotte remains active in Vietnam’s consumer market. Lotte Shopping, South Korea’s leading retailer, plans to open two to three more commercial complexes in the Southeast Asian country by 2030 as part of a strategy to more than double operating profits, said Kim Sang-hyun, the company’s CEO at an investor meeting in Seoul on September 15.

The company already operates the Lotte Mall West Lake Hanoi, a 354,000-square-metre facility opened in September 2023 that has carved out a niche in Vietnam’s retail sector with foreign luxury and fast-fashion brands. The launch came 12 months after Lotte broke ground on the mixed-use complex project in Ho Chi Minh City.