Serviced apartment rents edge up in 2023

By Ngoc Diem   February 18, 2024 | 07:44 pm PT
Serviced apartment rents edge up in 2023
Apartment blocks on Hanoi Highway in Ho Chi Minh City’s Thu Duc City. Photo by VnExpress/Quynh Tran
Rents for serviced apartments in Ho Chi Minh City and Hanoi increased by 1-8% last year.

In a recent market report, real estate consultancy Savills Vietnam said in the southern metro the highest hike of 8% was seen in grade C apartments. Grade B rents rose by 5% and grade A by 3%.

The average rent across all grades was VND516,000 (US$21) per square meter per month, a 3% increase.

But this was 11% lower than the rents in 2019.

The occupancy rate was 82%, up 6% percentage points year-on-year. In Hanoi the average rent was VND580,000 ($23.65), up 1%. The occupancy rate was 83%.

Real estate services provider Avison Young Vietnam said both rents and occupancy rates rose in the two cities.

Studio and two-bedroom apartments saw the highest rental occupancy.

Neil MacGregor, managing director of Savills Vietnam, said demand for serviced apartments rose as more foreign experts came to live in the two cities.

Foreign investment in HCMC soared by 49% last year to $5.9 billion, the highest for any province or city. It had more than 16,000 foreign workers, 92% more than second placed Hanoi.

With the economy recovering, accommodation demand is expected to grow steadily. FDI in Hanoi was at its highest level in the last three years after rising by 70% to $2.9 billion.

The city plans to build a number of industrial zones and clusters and improve infrastructure to attract investment, and the number of foreign experts is expected to increase as a result.

Avison Young said serviced apartment developers should prioritize locations near industrial parks, city gateways and areas with good transport infrastructure.

But, despite the growing rents and occupancy rates, the supply of serviced apartments is expected to be low.

HCMC is expected to add only 600 units at nine projects by 2025, including 260 this year.

Hanoi is expected to add 450 this year, mainly in grades A and B, with Tay Ho District accounting for 63% of them.

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