Savills Vienam latest Hanoi Real Estate Market Report in Q3/2018, in which we cover main 6 sectors, including Retail, Office, Serviced apartment, Hotel, Apartments and Villa & Townhouse.
GDP growth reached 6.9%, the highest 9M/2018 growth in eight years. In 2018, the government forecast GDP growth to reach 6.7 percent. Manufacturing and processing grew 13% YoY and continued to be a key GDP contributor.
Strong export momentum continued up 15% YoY to US$179 billion, delivering a US$5.4 billion trade surplus. The US remains the largest export market with US$35 billion, increasing 13% YoY.
Total registered FDI reached over US$25 billion, while FDI disbursement increased 6% YoY to US$13.3 billion with Japan being the largest contributor.
CPI growth was well controlled at 3.6%, approximately 4% under the limit.
International visitors strongly grew 23% YoY to 11.6 million, Asian tourists continued to be the main source market.
1. RETAIL: RENT CONTINUES TO RISE
Total stock was over 1.3 million m², up 2% quarter-on-quarter (QoQ) and 4% year on year (YoY) due to the entry of one shopping centre and one retail podium providing 27,400 m².
Average ground floor gross rent increased 4% QoQ and 12% YoY whilst occupancy was stable QoQ and up 1 ppts YoY. The shopping centre segment had the most improved performance YoY.
In the last quarter of 2018, nine new projects will provide 68,400 m². In 2019, eight projects suppling 319,500 m² will come online.
2. OFFICE: INCREASING GRADE A PERFORMANCE IN THE CBD
Total stock was nearly 1.7 million m², up 3.4% QoQ and 6.7% YoY with the entrance of one Grade B project. Over the past five years, stock has grown 7.2% pa.
Average gross rent increased 0.2% QoQ and 5.4% YoY whereas average occupancy was down -0.2 ppts QoQ and up 0.8 ppts YoY. Grade A buildings in the CBD saw upsurges in rent and occupancy despite weaker performance in other areas. Grade B is the only sector with increases in both rent and occupancy.
In Q4/2018 there will be six new projects supplying 109,000 m²; most are fitting out and located in the West. In 2019, 145,000 m² from 17 new projects will enter.
3. SERVICED APARTMENT: NEW JAPANESE- MANAGED PROJECT
Total stock from 49 projects increased 3% QoQ and 15% YoY due to the entry of a Japanese-managed, Grade A project. From 2018 onwards, 1,830 units from 17 projects will come online.
Average room rates (ARR) increased 0.9% QoQ but dropped -2.3% YoY. Average occupancy decreased -2.2 ppts QoQ and -4.6 ppts YoY. Grade A in Cau Giay charged the highest rent, 13% higher than Tu Liem and Tay Ho.
In the first nine months in 2018, registered FDI to Ha Noi was US$6.27 billion, accounting for 25% of total FDI to Viet Nam.
4. HOTEL: 5-STAR CONTINUES STRONG PERFORMANCE
Total stock was approximately 10,000 rooms, down -1% QoQ but up 1% YoY.
Average occupancy slightly decreased -1 ppt QoQ but increased 2 ppts YoY. ARR was down -5% QoQ and -9% YoY. Average revenue of five-star hotels was US$100/room/night, double that of four-star and triple three-star.
According to the Ha Noi Statistics Office, in the first nine months of 2018 there were approximately 4.3 million international visitors to Ha Noi, a 20% YoY increase.
With 43 projects coming online from 2019, pressure will increase across all grades.
5. APARTMENT: NEW SUPPLY AND SALES DOWN
Thirteen new projects and next phases of 18 projects provided 6,910 units, down -29% QoQ but up 12% YoY. Primary supply was 27,380 units, down -2% QoQ but up 14% YoY.
Sales were down -16% QoQ but up 11% YoY. The absorption rate decreased by -4 ppts QoQ and -1 ppt YoY to 24 percent. The average asking price was US$1,330/m², up 6% QoQ and 5% YoY. Grade B continued to dominate with 60% of stock, followed by Grade C with 33 percent.
In last quarter of 2018, more than 4,500 units will enter from 11 projects, most are Grade B.
6. VILLA / TOWNHOUSE: NEW SUPPLY Drops
Total stock was 43,255 dwellings, increasing 1.5% QoQ and 10.6% YoY. Ha Dong continues to lead with 23% market share, followed by Hoai Duc.
Three new projects and three new phases supplied nearly 250 dwellings. Primary stock was approximately 2,514 dwellings, down -27% QoQ and -33% YoY. Sales were down -35% QoQ and -32% YoY. Absorption was 31%, down -3.5 ppts QoQ and -4.9 ppts YoY.
From Q4/2018 to 2019, projects such as Vincity Gia Lam by Vingroup, Athena Fulland by Vimedimex and Sunshine Wonderland by Sunshine Group will come online.