Hanoi’s commercial real estate market is forecasted to be exciting soon in 2022. (Artwork: Ha Vu).

A recent report of Savills shows that, in the fourth quarter of 2021, the supply in the hotel market is quite stable. In which, more than half of the rooms come from 17 5-star hotels. This segment is expected to lead the supply until 2023 with 8 out of 13 new projects coming into operation.

The market is mainly located in the inner city, accounting for 54% of the total supply. Due to the loosening of social distancing measures from October, the fourth quarter capacity was only 27%, up 10 percentage points from the previous quarter. The 5-star hotel segment has the highest capacity with 31%, followed by 4-star hotels with 24% and 3-star hotels with 18%.

The average rent in 2021 decreased by 9% compared to the same period last year, to more than 1.6 million VND/room/night, led by the 5-star hotel segment with stable demand from business and residential guests. long-term.

According to the unit, with strict international travel bans, domestic tourists are still the main driving force for the industry. Although Vietnam has had a successful vaccination campaign and programs to revive international tourism, the outlook for the hotel industry remains highly dependent on the Government’s strategy and the emergence of the COVID-19 strain. new -19.

Sharing about the potential recovery of the hotel market, Mr. Matthew Powell, Director of Savills Hanoi, said: “Relaxing travel restrictions means that hotels in Hanoi will improve their capacity in the fourth quarter. The rapid vaccination program is a positive stepping stone to welcoming foreign tourists back. However, domestic tourists will continue to drive the hospitality industry in Vietnam.”

With the serviced apartment segment, Savills said, the supply in the last quarter of the year reached about 5,680 units, up 13% compared to the previous quarter and up 6% over the same period last year. Branded projects have the advantage when accounting for 46% market share, or 15 out of 61 projects.

Market activity was unchanged from the previous quarter, reaching 69% and increasing 2 percentage points over the same period last year. By segment, Grade A and Grade B were stronger, recording 10 projects with capacity above 90%, while Grade C recorded no projects reaching this level.

Savills said, the average rent of serviced apartments in Hanoi hit the bottom of the last three years, opening at 547,000 VND/m2/month. In which, the average rent of Grade A decreased by 4% and Grade C dropped the most with 11% compared to the same period last year.

According to this unit, the trend of investing in small-sized apartments is becoming clear. Compared with 2-bedroom and 3-bedroom apartments, small apartments have a 20-46% higher average rent per square meter and 4-15% higher revenue per square meter.

With the office segment, the total supply in 2021 increased by 11% compared to last year, reaching nearly 2.2 million m2  from 191 projects. In the past 5 years, Grade B supply increased the most with 8%/year, followed by Grade A and Grade C.

In terms of occupancy rate, Grade C office is dominating with 90%. Overall, capacity fell 1% qoq to 84%, representing a 5% year-on-year decrease.

Savills forecasts that by 2025, there will be 22 new projects with the potential to supply 700,000 m2  to the market. In which, the number of Grade A offices accounts for 54%. The West region was the hot spot as it added 62% of the total futures supply during this period, equivalent to 430,000 2.

Commenting on the market overview, Mr. Matthew Powell, Director of Savills Hanoi said that the real estate situation in Hanoi is showing good signs of recovery. Investors have always expressed optimism. Therefore, when the restrictions are lifted and the epidemic situation is under control, the market activity also becomes more active.

“The opening of the border in early 2022 will be key to the return of the tourism industry, which is a large part of Vietnam’s economy and can generate impressive numbers after the recovery. We I believe the market will recover soon in the near future and 2022 will be a great year for the development of Vietnam’s real estate industry,” he said.

T&G International Joint Stock Company

Address: 352 Hue Street, Le Dai Hanh Ward, Hai Ba Trung District, Hanoi

Hotline: 0345786803

Email: hrm@tginterjsc.com

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