The Hanoitimes - Hanoi`s property market was bolstered by high economic growth and fresh FDI inflows, mostly from Japan.
Hanoi’s real estate market performed well in the last three months of 2018 with significant growth in all segments including retail space, offices, apartments, and villas, according to a report by Savills Vietnam.
The good growth of the property market was thanked to the country’s GDP growth rate of 7.1% in 2018, bolstered by robust manufacturing and exports and the strong expansion of the service sector, said the report.
Part of Hanoi. Photo: Asiantoday
The national retail sales of goods increased 12% on year to US$145 billion in 2018.
Notably, registered foreign direct investment (FDI) to Hanoi was US$7.5 billion with 29% from Japanese investors in 2018.
Retail space: increase rent in new projects
The stock was approximately 1.4 million square meters (sq.m) in the fourth quarter (Q4), up 3% on quarter and 6% on year after the entry of three shopping centers in the secondary area.
Average ground floor gross rent continued its upward trend, rising 3% on quarter and 17% on year. The retail podium segment had the most improved performance.
Offices: prospects ahead
Stock was unchanged on quarter at nearly 1.7 million sq.m with the stable availability of Grade A supply and two additional buildings of Grade B.
Meanwhile, average gross rent saw a rise of 3% on year. In terms of supply, there will be approximately 500,000 sq.m to be added until 2020. Five Grade A projects are expected to enter the market in 2019.
Apartment: record in supply
The market welcomed as many as 15,100 units from eight new projects and the next phases of 28 projects, up 120% on quarter and on year.
Transactions rose by 81% on quarter and 69% on year whilst the absorption rate increased by 9 percentage points (ppts) on quarter and 5 ppts on year to 34 percent. The average asking price was US$1,370/m², up 3% on quarter and 10% on year. Grade B accounted for 61% of stock, followed by Grade C with 31 percent.
More than 41,300 units from 36 projects, mostly Grade B will be available for the market in 2019.
Hotel: high average room rate
Visitors in Hanoi. Photo: Tong Cuc Du Lich
The average room rate (ARR) was up 14% on quarter and unchanged on year. This was largely driven by a rise of 16% on year in the number of international visitors to Hanoi which hit 5.7 million in 2018.
Average revenue of five-star hotels was US$116/room/night, double that of four-star and triple that of three-star facilities.
Hotel stock decreased 1% on quarter and on year due to the withdrawal of one 3-star hotel but three new four- to five-star hotels will supply approximately 480 rooms in 2019.
Villas and townhouses: strong performances
Four new projects and nine new phases supplied nearly 2,350 dwellings during Q4. Transactions increased 21% on year and absorption was 40%, up 3.8 percentage points on year.
Gia Lam district topped the localities with 52% of sales, followed by Dong Anh district and Long Bien urban district with 9% each.
In 2019, projects including Athena Fulland by Vimedimex, Sunshine Wonderland by Sunshine Group, and Vincity Sportia by Vingroup will be open for the market.
Serviced apartment: higher rent
Average monthly rent rose 5% on year to US$25/sq.m with unchanged occupancy. By Q4, total 48 properties provided 4,600 units, the number will be added 1,100 units from nine projects in 2019-2020.
Grade C decreased 14% in supply and 17% in rent during the quarter.