Savills Vietnam reports on Hanoi real estate market Q2/2018

11 July 2018

GDP growth was 7.1% in 1H/2018, the highest 1H growth for the last seven years. Industry and construction were the main contributors, followed by the service sector.

Trade balance was positive with a surplus of US$2.7 billion due to strong export value of US$114 billion. The USA and EU remain the main export markets.

Registered FDI was over US$20 billion in 1H/2018 with Japan being the largest contributor. Disbursed FDI reached US$8.4billion, up 8% YoY. 

International visitors were robust with 7.9 million, up 27% YoY.

1.    RETAIL: RENT INCREASED ACROSS ALL SEGMENTS

Total stock was approximately 1.3 million m², up 0.6% quarter-on-quarter (QoQ) and 4.4% year on year (YoY) from the entry of the first shopping centre in Hoang Mai district providing 6,500 m².

Average ground floor gross rent increased 8.6% QoQ and 9.8% YoY while occupancy was stable QoQ and up 7.1 ppts YoY. The shopping centre segment had the most improved performance.

In 2H/2018, 11 new projects will enter the market, cumulatively providing 98,000 m². Some projects with significant scale over 100,000 m² are scheduled to launch in 2019.

2.    OFFICE: RENT INCREASED, OCCUPANCY STABLE

Total stock was over 1.6 million m², stable QoQ and up 1.8% YoY. Over the past five years, stock has grown at an average 5.9% pa.

Average gross rents increased 2.4% QoQ and 4.3% YoY whereas average occupancy was stable QoQ and up 0.6 ppts YoY. Grade A registered the most improved occupancy while Grade B saw the most improved rent.

2H/2018 will welcome 10 new projects supplying nearly 155,000 m², all fitting out and mostly located in the West. In 2019, another 120,000 m² from 12 new projects is expected to come online.

3.    SERVICED APARTMENT: DYNAMIC SUPPLY WAVE

Total stock from 50 projects decreased -3% QoQ but rose 13% YoY due to new launches, renewed units and a deactivated project. From 2018 onwards, 1,860 units from 15 projects are expected to become available.

Average occupancy was stable QoQ and down -3 ppts YoY. Average room rates (ARR) increased 1.3% QoQ but dropped -2.2% YoY. Cau Giay had the highest rent US$32/m²/mth while projects in Hai Ba Trung had at the highest occupancy at 96 percent.

In 1H/2018, registered FDI to Ha Noi lead nation with US$5.9 billion, 59% higher than the inflow to HCMC.

4.    HOTEL: INTERNATIONAL VISITOR GROWTH

Total stock was approximately 10,000 rooms, stable QoQ and up 8% YoY.

Average occupancy slightly decreased -2 ppts QoQ and YoY. ARR was down -4% QoQ and -5% YoY. Average revenue of five-star hotels was US$108/room/night, double that of four-star and four times of three-star.

According to the Ha Noi Statistics Office, in the first six months of 2018 there were approximately three million international visitors to Ha Noi, a 26% YoY increase.

With 43 projects coming online from 2018, pressure is set to increase across all grades.

5.    APARTMENT: NEW SUPPLY AND HIGHER SALES

In Q2/2018, eleven new projects and next phases of 31 projects launched 9,760 units, up 77% QoQ and 43% YoY. The primary supply was 28,000 units, up 17% QoQ and 14% YoY.

Sales were up 31% QoQ and 11% YoY. Absorption rate increased by 3 ppts QoQ but decreased -1 ppt YoY to 27 percent. The average asking price was US$1,160/m², down -7% QoQ and         -12% YoY.

Grade B accounted for nearly 60% of total share, followed by Grade C with 38 percent.

In 2H/2018, more than 14,300 units will enter the market from 20 projects, most of which are Grade B and Grade C.

6.    VILLA/ TOWNHOUSE: STABLE PERFORMANCE  

Total stock was 42,609 dwellings, increasing 3.7% QoQ and 12.8% YoY. Ha Dong continues to lead with a 23% market share, followed by Hoai Duc.

Seven new projects and eight new phases supplied nearly 1,064 dwellings. Primary stock was approximately 3,451 dwellings, up 8.2% QoQ but down -12.9% YoY.

Sales were up 48% QoQ but down -9.4% YoY. Absorption was 34%, up 9.2 ppts QoQ and 1.3 ppts YoY.

From Q3/2018 to 2019, projects such as Vincity Gia Lam by Vingroup and Smart Town by BRG-Sumitomo are expected to enter the market.

 
 

Key Contacts

Dinh Huong Linh

Dinh Huong Linh

National Head of MarCom
Marketing Communication

Savills HCMC

+84 24 3946 1300 Ext 112