Savills Vietnam reports on Hanoi real estate market Q22017

12 July 2017

First half GDP growth was 5.7%, a 1 ppt increase over 1H/2016.

Registered FDI had 55% annual growth. Japan with US$4.6 billion was the highest contributor. FDI disbursement was up 7% YoY.

Inbound tourist growth momentum continues and was up 30% YoY. Total international visitors numbered 6.2 million, of which Asians were 74 percent.

1H/2017 credit growth at 7.5% is a 6-year high.

1. RETAIL: Improved Performance

In Q2/2017, the total retail stock was nearly 1,250,000 m², up 0.4% quarter-on-quarter (QoQ) and 7.4% YoY due to the entry of two new shopping centres, cumulatively supplying approximately 37,200 m².

Average ground floor rents recovered with a slight 3.0% growth QoQ. Average occupancy maintain an upward trend increasing 3.5 percent QoQ due to improvements in all three segments, department store (1.4 ppts), shopping centre (4.9 ppts) and retail podium (1.9 ppts).

The retail market continued to be underpinned by positive economic indicators. The “Bricks and Clicks” model has become increasingly common in order to engage shoppers and strengthen sales.

2. OFFICE: Improved Occupancy but Lower Rents

The total office stock was approximately 1,620,000 m2, up 0.2% QoQ but down -1.2% YoY.

Average rents decreased -0.8% QoQ but increased 0.9% YoY while average occupancy increased 3.7 ppts QoQ and 7.4 ppts YoY. Occupancy improved across all grades, particularly grade A. CBD Grade A projects had better performance than the non-CBD.

In 2H/2017, 46,000 m2 will be supplied by three new projects which are all fitting out. The future supply will remain concentrated in the West and Secondary areas, with no new supply in the CBD for the next two years.

3. SERVICED APARTMENT: Lower Occupancy and Rent

The total serviced apartment supply was over 4,130 units from 50 projects, up 4% QoQ and 8% YoY due to two new entrants and a reactivated Grade B project. From Q3/2017, there will be over 1,830 units supplied from 11/14 projects.

The average occupancy reached 90.2%, down -1.4 ppts QoQ but up 6.3 ppts YoY. The average room rate (ARR) achieved US$24.6/m2/mth, down -2.4% QoQ and -2.7% YoY. Total take-up decreased -46% QoQ.

According to the Viet Nam Foreign Investment Agency in 1H/2017, disbursed FDI was US$ 7.7 billion (up 6.5%YoY). Up to 1H/2017, Ha Noi remained fourth highest total registered FDI recipient nationwide at US$ 26.3 billion.

4. HOTEL: 5-star Continues to Perform Well

The total hotel stock was approximately 9,300 rooms, up 1% QoQ but down -3% YoY.

The average occupancy remained stable QoQ but up 10 ppts YoY. Five-star average occupancy was 80%. The ARR decreased -7% QoQ but increased 32% YoY. RevPAR was down -7% QoQ but up 52% YoY.

According to the Ha Noi Statistics Office, in the first 6 months of 2017 there were approximately 2.33 million international visitors to Ha Noi, a 14% YoY increase.

In 2H/2017 more than 550 rooms will be launched.

5. APARTMENT: Stable Performance

The total primary stock was 24,550 units, up 2% QoQ and 42% YoY. Eleven freshly-launched projects and sixteen newly-launched projects provided 6,850 units, falling 27% QoQ and 4%YoY.

Approximately 6,800 units were sold, increasing 5% QoQ and 13% YoY, of which Grade B dominated with over 42% share. The absorption rate was 28%, up 1 ppt QoQ but down -7 ppts YoY. The primary price dropped 3% QoQ to Ú$1,320/m2.

Approximately 23,500 units will come online in 2H/2017, and 63,740 units will be supplied from 2018 onwards.

Top three future suppliers will be Ha Dong, Hoang Mai, Tu Liem, occupied for 60% share.

6. VILLA | TOWNHOUSE: Increased Sales

The total stock was 37,787 dwellings, increasing 4.8% QoQ and 15.8% YoY. Twelve new projects entered the market supplying approximately 1,719 dwellings, of which townhouses accounted for 66 percent.

In Q2/2017, there were 1,310 sales, in which townhouses were two times higher than villas. Total sales increased 126% QoQ and almost 4.5 times YoY. Ha Dong district was the best performer, following by Hoang Mai district.

The absorption rate was 33%, up +13 ppts QoQ and +21 ppts YoY.

More than half of the 78 known future projects are in planning. From Q3/2017 to 2018, over 1,667 dwellings will be supplied.

 
 

Key Contacts

Dinh Huong Linh

Dinh Huong Linh

National Head of MarCom, Savills Vietnam

Savills Hanoi

+84 24 3946 1300 Ext 112