Serviced house market in Hanoi elevated considerably at 20% year-on-year, rents continued to say no, rental capability was secure at almost 70% per yr. Accordingly, because of the Covid-19 epidemic, the variety of overseas employees has not but been capable of return to work.
The affect of travel restrictions because of the Covid-19 epidemic, made it inconceivable for overseas employees – the primary supply of demand for serviced flats to return to Vietnam to work. Increased industrial improvement in Bac Giang, Thai Nguyen and Hai Duong has boosted future provide within the Hanoi perimeter. Korean tenants overtook Japan to make up the bulk in Hoan Kiem, Cau Giay and Nam Tu Liem districts.
In the second quarter of 2021, the availability of serviced flats in Hanoi reached 5,500 models, a pointy enhance of 20% year-on-year. In explicit, the launch of two Grade B tasks in Ba Dinh and Dong Da districts after a protracted wait has supplied 136 extra flats. The share of Grade A properties has been secure over the previous 5 years at 53%, largely managed by Ascott and the brand new Oakwood model.
Contrary to provide, rents for serviced flats in Hanoi within the quarter fell -8% YoY, to $24/m2/month. Over the previous 5 years, Cau Giay district has maintained the very best rental charge, reaching 32USD/m2/month within the first six months of 2021. Dong Da district rose to take the second place, after the Grade A challenge Novotel Hanoi Thai Ha comes into operation.
Total market capability within the final quarter stood at 69%. Particularly, the suburban district of Gia Lam nonetheless recorded a major enhance, 32 proportion factors quarter-on-quarter, due to Vinhomes Ocean Park S2.17’s capability to fulfill the excessive demand for worldwide college students and Korean specialists working within the space. neighboring areas. After a document yr, Korean tenants surpassed Japan to make up the bulk in Hoan Kiem, Cau Giay and Nam Tu Liem districts. Foreign specialists working in industrial zones are the primary supply of demand within the serviced house market. The Covid-19 pandemic that broke out in industrial zones in Bac Giang and Bac Ninh provinces since May 2021 has negatively impacted the demand for serviced flats.
Ms. Do Thi Thu Hang, Senior Director, Research and Consulting Department, Savills Hanoi said: “The serviced apartment market capacity has been recorded to be stable year-on-year, partly because there is still a fixed number of foreign experts in Vietnam. Thanks to a certain number of specialists, the demand for serviced apartments is still recognized. Regarding future supply, the Hanoi market is expected to welcome about 2,400 apartments from 19 projects. Foreign management units will hold 96% of the future units. CapitaLand has announced the acquisition of the 364-unit Somerset Metropolitan West Hanoi project, a $155 million deal that is expected to stir up the West region after a long period of silence.
The recovery of the serviced apartment market is expected on the vaccine deployment process as well as the shift in foreign investment (FDI) flows. Despite many difficulties, positive macroeconomic results in the first 6 months helped boost the market’s outlook. In the first half of 2021, Hanoi ranked sixth in the country in terms of attracting registered FDI with 761 million USD. Five northern provinces are among the top 10 provinces receiving the highest investment, contributing 25% of total registered FDI, including: Hai Phong, Hanoi, Quang Ninh, Bac Giang and Bac Ninh.
Notably, the trend of industrial development is associated with the growth of the serviced apartment market. Mr. Matthew Powell, Director of Savills Hanoi said: “Recently increased industrial development in Bac Giang, Thai Nguyen and Hai Duong promotes future supply in the Hanoi perimeter area due to the favorable access from here to these provinces.”.
“Some localities like Bac Giang possess all the converging factors to attract large enterprises, such as Foxconn, thereby bringing in many supporting corporations to develop for the province, not only attracting public land. industry but even urban land. It can be seen that the industrial development in the neighboring provinces has boosted the future supply of the serviced apartment market, especially in the ring areas of Hanoi. The upcoming ring area will have a series of serviced apartment projects from big brands, for example Fraser Suites will launch in the 3rd ring area. Future supply will be mainly in the belts. and convenient to go to the provinces, it can be said that this is a prominent trend of pioneering serviced apartment product lines in the Hanoi market.”, he analyzed.
It is forecasted that within the coming time, the demand for overseas employees to return to Vietnam to work will enhance and primarily a bunch of high-tech employees, specialists with administration expertise and have been licensed or certified. situations for licensing. Especially when Vietnam is piloting to scale back the isolation interval to 7 days for individuals who obtain the complete dose of vaccine from July 2021. As of June 2021, the international locations with the very best funding within the North are rising the speed of second vaccination, together with Singapore (36% of the entire inhabitants), Hong Kong (19%), China Korea (16%), Japan (12%) and Korea (10%).
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