New Apartment Supply in HCM City Hits 5-year High in Q4/2015: Savills

Tuan Minh

09:00 13/01/2016

BizLIVE - Savills Vietnam has released a report on Ho Chi Minh City’s real estate market performance in Q4/2015, which saw improvements in almost all segments.

New Apartment Supply in HCM City Hits 5-year High in Q4/2015: Savills

A nocturnal view of HCM City. (Photo: Getty)

As many as 11,800 new apartments were launched from 17 new and seven existing projects in HCM City in the fourth quarter (Q4) of 2015, rising 20% quarter-on-quarter (qoq) and more than 100% year-on-year (yoy), real estate service firm Savills Vietnam has said in its latest report.   
This was the largest new supply by quarter over last five years, it says. Total primary stock was nearly 37,200 units, increasing 20% qoq and 101% yoy.
Nearly 7,700 units were sold in the quarter, up by 47% qoq and 86% yoy. Both Grade A and B has reached the highest sales level in the last five years while Grade C’s sales remained stable, accounting for 37% of total transactions.
The office segment also witnessed significant performance improvement. Approximately 57,000m² from two Grade B and four Grade C projects entered the market, prompting total stock to increased 4% qoq and 8% yoy.
The office market last quarter had the best performance in the last four years. The average occupancy was highest 94%. The average rent was up 3% yoy, with Grade B and C rent increasing both by 1% qoq and 1% yoy.
Total take-up was 60,000m², up 264% yoy, in which Grade B share was 65%. “Office demand increased following growth in GDP and FDI capital and the effect of revised real estate law and trade agreements,” says the report.
Regarding the retail market, the new supply was 84,400 m2 from five projects in the quarter. The total retail stock reached more than one million m², increasing by 7% qoq and 16% yoy.
The average gross rent slid 6% qoq and 10% yoy, attributed to new shopping centers’ competitive rents in the non-CBD (central business district).
The city’s hotel market stock increased by 3% qoq and 12% yoy, due to the entrance of 503 rooms from one four-star and three five-star hotels. The average occupancy leaped seven percentage points (ppts) qoq and one ppt yoy.