09/01/2019

SAVILLS REPORT ON Hanoi REAL ESTATE MARKET Q4/2018

GDP growth reached 7.1%, bolstered by strong manufacturing and exports. The expansion of the service sector was robust, supported by private consumption and record tourist arrivals. National retail sales of goods increased 12% YoY to US$145 billion.

Total export value in 2018 exceeded US$244 billion, resulting in a trade surplus of US$7.2 billion. FDI sectors accounted for over 70% of export value, the US remained the largest market.

Although total registered FDI slightly decreased -1% YoY, disbursed FDI in 2018 increased 9% to over US$19 billion.

 

1. RETAIL: NEW PROJECTS INCREASE RENT

Total stock was approximately 1.4 million m², up 3% quarter-on-quarter (QoQ) and 6% year-on-year (YoY) after the entry of three shopping centers in the Secondary area.

Average ground floor gross rent continued its upward trend of 3% QoQ and 17% YoY whilst occupancy was slightly down -3 ppts QoQ and -4 ppts YoY. The retail podium segment had the most improved performance.

Retail market performance

Source: Savills Research & Consultancy

 

2. OFFICE: BRIGHT FUTURE

Stock was stable QoQ at nearly 1.7 million m2. Grade A supply remained unchanged whilst Grade B welcomed two new buildings.

Office market performance

Source: Savills Research & Consultancy

Overall market performance remained stable QoQ and YoY, the most significant change was a 3% YoY increase in average gross rent. Improved Grade A performance in non-CBD areas resulted in an upward trend overall despite a slight QoQ reduction in CBD rent.

There will be new supply of approximately 500,000 m2 until 2020. Five Grade A projects are expected to enter in 2019.

 

3. SERVICED APARTMENT: GRADE B DECLINES

A total of 48 properties provided 4,600 units due to a new Grade A project and the closure of two Grade B projects. From 2019-2020, 1,100 units from nine projects will enter.

Overall market performance increased slightly QoQ. Average rent was US$25/m²/mth, up 5% YoY, whilst average occupancy remained at 86 percent. Grade C decreased -14% in supply and -17% in rent. Registered FDI to Ha Noi was US$7.5 billion, Japanese investors accounted for 29 percent.

Service apartment market performance

Source: Savills Research & Consultancy

 

4. APARTMENT: RECORD-BREAKING NEW SUPPLY

Eight new projects and the next phases of 28 projects provided approximately 15,100 units, up approximately 120% QoQ and YoY.

 

Apartment market performance

Source: Savills Research & Consultancy

Transactions rose by 81% QoQ and 69% YoY whilst the absorption rate increased by 9 ppts QoQ and 5 ppts YoY to 34 percent. The average asking price was US$1,370/m², up 3% QoQ and 10% YoY. Grade B accounted for 61% of stock, followed by Grade C with 31 percent.

In 2019, more than 41,300 units will enter from 36 projects, most will be Grade B.

 

5. HOTEL: RECORD-BREAKING NEW SUPPLY

Hotel stock decreased -1% QoQ and YoY due to the withdrawal of one 3-star hotel.

Average occupancy slightly increased 1 ppt QoQ but decreased -2 ppts YoY.  Average Room Rate (ARR) was up 14% QoQ but stable YoY. Average revenue of five-star hotels was US$116/room/night, double that of four-star and triple that of three-star.

Hotel market performance

Source: Savills Research & Consultancy

According to the Ha Noi Statistics Office, in 2018 there were approximately 5.7 million international visitors to Ha Noi, a 16% YoY increase.

In 2019, three new four- to five-star hotels will supply approximately 480 rooms.

 

6. VILLA / TOWNHOUSE: STRONG PERFORMANCE

Four new projects and nine new phases supplied nearly 2,350 dwellings. Transactions increased 21% YoY and absorption was 40%, up 3.8 ppts YoY.

Gia Lam led with 52% of sales, followed by Dong Anh and Long Bien with nine percent each.

Villa & townhouse stock

Source: Savills Research & Consultancy

In 2019, projects including Athena Fulland by Vimedimex, Sunshine Wonderland by Sunshine Group and Vincity Sportia by Vingroup will enter.

 

 

 

 

 

 

 

 

 

 

 

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