Serviced apartment market warming up

By Vu Le   May 1, 2023 | 06:00 am PT
Serviced apartment market warming up
Serviced apartments in Ho Chi Minh City’s downtown. Photo by VnExpress/ Vu Le
Serviced apartment buildings in Ho Chi Minh City posted higher occupancy rates in the first four months of this year, thanks to larger numbers of short-term business visitors and tourists.

A survey by VnExpress showed that two affordable 60-unit serviced apartment buildings in Tan Binh District near Tan Son Nhat international airport gained an occupancy rate of 90%.

More specifically, the occupancy rate for standard serviced apartments with rents of VND680,000-750,000 (US$29-32) per night was 95%.

The manager of the serviced apartment buildings said the competitive offering price compared to hotel rates has helped them retain existing tenants and lure new ones.

A company currently leasing 230 high-end serviced apartments and officetels near the Landmark 81 Tower in Binh Thanh District said the occupancy rate surged sharply in the last four months, surpassing 95%.

The company’s one-bedroom serviced apartments with rents of VND1.3 million per night were fully booked on both weekdays and weekends.

Its two-bedroom apartments saw an occupancy rate of nearly 90%, attracting both short-term and long-term local tenants, as well as guests from South Korea, Japan and Taiwan.

Serviced apartments with three bedrooms or more had an occupancy rate of 80%, and they were mostly favored by large families, mainly overseas Vietnamese.

The average rent of serviced apartments around the Landmark 81 Tower is now nearly double compared to the pandemic period.

The rent of one-bedroom apartments surged from VND500,000-700,000 per night in the second quarter of 2021 to VND1.2-1.3 million per night in the first months of 2023.

Nguyen Hoang, manager of a mid-end serviced apartment building in Phu Nhuan District, said the number of tenants increased sharply after Tet (Lunar New Year Festival in late January), pushing the occupancy rate to 87%.

Since March, the occupancy rate has remained above 80%, which is a profitable level, he added.

Real estate consultancy Colliers Vietnam said the occupancy rate of high-end and mid-end serviced apartments in HCMC reached 91-92% in the first quarter of the year, partly thanks to the higher number of foreign experts coming to work in Vietnam.

According to property consultancy Savills Vietnam, serviced apartments in all high-end, mid-end and affordable segments posted an average occupancy rate of 84% in the first quarter, surging 16 percentage points against the same period last year.

The majority of serviced apartment tenants are professionals from Japan, South Korea and Taiwan.

The average rent of serviced apartments rose by 7%, however, that’s still 10% lower than in pre-pandemic first quarter of 2019.

David Jackson, CEO of Colliers Vietnam, said the demand for serviced apartments will continue to increase, especially in the second half of this year when more Chinese tourists are expected to visit the country.

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