According to Cushman & Wakefield Vietnam (C&W), there are approximately 2,900 serviced apartments in 49 projects for the whole Hanoi market. 37 percent are managed by international operators such as Frasers Hospitality, Sedona, The Ascott, IHG and Accor; while 63 percent are self - managed.
Grade A contributes the highest share of the whole market – generally much larger in scale. The supply of this grade increased by average 28 percent in comparison with previous year, because of an additional supply from Calidas Project. By mid 2014, Grade A supply will increase further as 240 units of Lotte Centre Hanoi will come on line. Grade B supply remains unchanged compared to 2011 and stands at nearly 900 units.
Tay Ho District (West Lake area) is still the preferred location for Western expatriates. Ba Dinh area is the second leading supply of accommodation, especially for Japanese expatriates. West Hanoi is the new CBD with the emerging trend of relocation for office and accommodation. Meanwhile projects in Hai Ba Trung District are smaller in scale generally, 4 out of 8 projects have less than 10 units.
It is projected that competition on rents and services between serviced apartments and buy-to-lease apartments will continue and rental pressures are expected.
As for the HCM market, there are approximately 3,300 serviced apartments in 63 projects. Grade A and B dominate the market, contributing the highest share of the whole market inventory. 70 percent of Grade A & B projects are managed by international operators such as Sedona, The Ascott, IHG, Phu My Hung, Norfolk Group, and The Peninsula Properties. 30 percent are self – managed.
Grade A supply remains unchanged year on year. 94 percent of total Grade A units are located in the CBD and CBD Fringe. Meanwhile Grade B supply increased by approximately 7 percent year on year. Approximately 50 percent of Grade B units are concentrated in the CBD and CBD Fringe.
District 1 still accounts for the highest share of the total supply. Tenants, especially singles, prefer to lease in the CBD due to the location. District 2 and 7 ranked second in terms of supply. These districts attract families due to the larger unit types and concentration of international schools. Most supply is in the CBD, districts 1 and 3, while the new urban areas such as districts 2 and 7 have no Grade A projects.
The rental rates are projected to remain stable in Grade A & B in CBD and but go lower in surrounding districts. Average occupancy rates of all grades are predicted to be driven downwards by tenants’ budget tightening and relocation.
Giang Tu
Vietnamese
