Several Segments of Hanoi’s Realty Market Perform Better in Q2: Savills

Tuan Minh

11:35 17/07/2017

BizLIVE - Do Thu Hang, associate director of research at Savills Hanoi, noted that strong foreign direct investment will drive the office segment up.

Several Segments of Hanoi’s Realty Market Perform Better in Q2: Savills

A view of the center of Hanoi. Photo: Internet

A number of segments in Hanoi’s real estate market recorded better performance in the second quarter of this year, indicating investor sentiment remains robust, Savills Vietnam has said in a quarterly report.
According to the real estate services company, some 6,800 apartments were sold in the quarter, increasing 5% quarter-on-quarter (q-o-q) and 13% year-on-year (y-o-y), of which Grade B dominated with over 42% share.
The absorption rate was 28%, up one percentage point (ppt) q-o-q but down seven ppts y-o-y. The primary price dropped 3% q-o-q to $1,320/square meter because the total primary stock increased 2% q-o-q and 42% y-o-y to 24,550 units.
Approximately 23,500 units will come online in the second half of 2017, and 63,740 units will be supplied from 2018 onwards, with Ha Dong, Hoang Mai, Tu Liem districts being the top three future suppliers.
In the retail segment, average ground floor rents recovered with a slight 3.0% growth q-o-q. Average occupancy maintained an upward trend, with an increase of 3.5% q-o-q due to improvements in all three segments namely department store, shopping center, and retail podium.
For the office segment, average occupancy increased 3.7 ppts q-o-q and 7.4 ppts y-o-y.
Occupancy improved across all grades, particularly grade A. However, average rents decreased 0.8% q-o-q but increased 0.9% y-o-y.
In the second half of 2017, three new projects will supply 46,000 m2. The future supply will remain concentrated in the West and Secondary areas, with no new supply in the CBD for the next two years, according to Savills.
Demand for CBD Grade A office, especially international-standard buildings, will remain high given strong foreign investment inflow, said Do Thu Hang, associate director of research at Savills Hanoi.
The total hotel stock was approximately 9,300 rooms, up 1% q-o-q but down 3% y-o-y. The average occupancy remained stable q-o-q but up 10 ppts y-o-y. Five-star average occupancy was 80% and revenue per available room (RevPAR) reached 153 USD/room/night.
The ARR decreased 7% q-o-q but increased 32% y-o-y. RevPAR was down 7% q-o-q but up 52% y-o-y.
Despite being in the low season, the average occupancy stood at 74%. “This is a good occupancy for developers to investment in hotel real estate,” Hang sai.
A number of international brand names such as Hilton Westlake, Four Seasons, and Accord will be present in Hanoi, she added.
According to the Hanoi Statistics Office, the city welcomed 2.33 million international visitors in the first 6 months of 2017, a 14% y-o-y increase.
On villa and townhouse, in Q2/2017, there were 1,310 sales, in which townhouses were two times higher than villas. Total sales increased 126% q-o-q and almost 4.5 times y-o-y. Ha Dong district was the best performer, following by Hoang Mai district.
The total stock was 37,787 dwellings, increasing 4.8% q-o-q and 15.8% y-o-y. Twelve new projects entered the market supplying approximately 1,719 dwellings, of which townhouses accounted for 66%.
The absorption rate was 33%, up 13 ppts q-o-q and 21 ppts y-o-y, Savills said.

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