01/10/2019 | News release | Distributed by Public on 01/09/2019 23:13
Hanoi's real estate market is set for a record-breaking new supply of apartments and hotels in 2019 while the office sector is also predicted to enjoy a bright future, according to real estate service provider Savills Vietnam.
The apartment sector was highlighted in a report updating the performance of Hanoi's real estate market in the fourth quarter of 2018, released by Savills Vietnam on January 9.
Eight new projects, along with the next phases of 28 other projects provided the Hanoi market with nearly 15,100 units during the last three months of 2018, up around 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 (ppt) on-quarter and 5 ppts on-year to 34%. The average asking price was US$1,370 per square metre, up 10% on-year. Grade B accounted for 61% of the stock, followed by Grade C with 31%.
Savills predicted that more than 41,300 units from 36 projects would enter the Hanoi market in 2019, most of them being Grade B.
As for the hotel segment of the Hanoi market, Savills expected three new four-to-five star hotels to provide the market with approximately 480 additional rooms in 2019.
During the fourth quarter of 2018, hotel stock decreased by 1% on-quarter and on-year due to the withdrawal of a three-star hotel.
The average hotel occupancy slightly increased by 1 ppt on-quarter but dropped by 2 ppts on-year. Notably, the average room rate (ARR) rose 14% on-quarter while the average revenue of five-star hotels was US$116 per room per night, double that of four-star hotels and triple that of three-star hotels.
Meanwhile, office stock remained stable in the fourth quarter of 2018, at nearly 1.7 million square meters. The supply of Grade A offices remained unchanged whilst Grade B welcomed two new buildings.
Overall, the market performance of the office sector remained steady on-quarter and on-year, but the most significant change occurred with a year on year hike of 3% in average gross rent. An improved Grade A performance in central business district (CBD) areas underpinned an upward trend overall despite a slight quarter-on-quarter reduction in CBD rent.
Savills stated that five Grade A projects are expected to enter the Hanoi market in 2019 while predicting a new supply to the office sector of approximately 500,000 square meters by 2020.