DNVN - Strong foreign direct investment (FDI) will cause the demand for serviced apartments to grow strongly. From 2025, 17 projects are expected to be launched on the market as soon as possible to meet this demand.
Savills Hanoi’s Quarterly Market Summary Report for Q4/2024 states that the office market is now a tenant’s market, with a diverse new supply from Grade A projects in the inner city and the West of Hanoi. Tenants benefit from high-quality projects with more rent-free incentives.
By the end of 2024, total office supply will reach 2.34 million square meters across 192 projects, up 9% quarter-on-quarter and 10% year-on-year. This increase will be driven by 6 new projects, including 3 Grade A projects (BRG Diamond Park Plaza, Grand Terra and Heritage West Lake) and 3 Grade B projects (HUD Tower, My Dinh Pearl and Vinacomin Tower).
The Class B segment continues to account for a large proportion of 49% of total supply. The inner city and the western area of Hanoi respectively contribute 41% of Hanoi's total supply. Since 2020, the total supply in the market has increased by an average of 4% per year, of which Class A increased by 4% per year, Class B increased by 5% per year and Class C increased by 1% per year.
Take-up has been positive across all segments, despite the impact of new supply. Grade A has seen a steady increase in take-up since 2010.
Notably, office leasing activities are shifting outside the central area of the capital. Office relocation transactions account for 71% of the total leasing area, of which 51% are moving to the inner city area and 49% to the western area of Hanoi.
Tenants in the information and communications technology (ICT) sector led demand, accounting for 50% of total leased space, followed by tenants in the healthcare and pharmaceutical sectors with 21%.
It is expected that by 2027, the office leasing market will have an additional 265,000 m² from 11 projects. The Grade A segment will dominate, contributing 92% of the new supply from 9 projects, while the remaining 8% will come from 2 Grade B projects.
Notable projects expected to come online from 2025 include Tien Bo Plaza, 29 Ly Thai To, The Marc 88 and Oriental Square. After 2027, additional supply is expected to reach 864,500 m² from 28 projects, of which 64% is in the Grade A segment.
According to Savills Hanoi, the hotel market is recovering thanks to strong tourism demand, tourism growth policies and significant future supply. This affirms the market's development potential.
Mr. Troy Griffiths - Deputy General Director of Savills Vietnam said that hotel projects are showing strong signs of recovery. Specifically, in the fourth quarter of 2024, 67 hotel projects provided 11,064 rooms, down 1% quarter-on-quarter and year-on-year as Eden Hotel was no longer on the ranking list. The supply of 5-star and 4-star hotels was stable while the supply of 3-star hotels decreased by 3%.
Occupancy growth was up 3 percentage points quarter-on-quarter and 7 percentage points year-on-year. 5-star occupancy increased 3 percentage points quarter-on-quarter, 3-star increased 7 percentage points quarter-on-quarter while 4-star was unchanged. Average room rates increased 1% quarter-on-quarter but decreased 6% year-on-year. 5-star hotel rates were unchanged quarter-on-quarter while 4-star and 3-star hotels each increased 4% quarter-on-quarter.
In 2024, Hanoi welcomed 27.9 million tourists, up 12.7% year-on-year. International visitors reached 6.4 million, up 34.4% year-on-year with 4.5 million overnight guests. Domestic visitors reached 21.5 million, up 7.5% year-on-year.
Total tourism revenue reached VND110.5 trillion, up 18.3% year-on-year. The city hosted several major events in November, including the Hanoi Creative Design Festival and the Hanoi Food and Culture Festival.
As of the end of October 2024, the Civil Aviation Authority of Vietnam has allowed 4 domestic airlines and 72 international airlines to operate 2,720 round-trip flights per week domestically. The Hanoi - Ho Chi Minh City route is ranked as the 4th busiest domestic route globally.
With positive signs in tourism and aviation, Savills Hanoi forecasts that future hotel supply is expected to reshape the market, with 68 projects expected to provide 12,065 rooms from 2025.
In 2025, 2,936 rooms in 11 projects are expected to be completed, including 8 5-star hotels and 3 4-star hotels. 360 rooms in 2 projects are planned to launch in 2026.
The inner city will account for 42% of the new supply with 5,027 rooms across 22 projects. International operators will manage 37% of the new rooms while domestic operators will manage the remaining 63%. Notable upcoming brands include Hilton, Fusion, Accor and Four Seasons.
According to Mr. Matthew Powell - Director of Savills Hanoi, the expansion and development of industrial zones in Hanoi along with strong FDI capital inflows will cause the demand for serviced apartments to grow strongly. From 2025, 17 projects are expected to launch 4,077 new units to the market. In 2025, 7 projects will provide 2,889 units, of which Tay Ho View Complex is expected to add the largest supply of Grade A.
A project in Tay Ho District is expected to provide 162 units by 2026. 83% of future supply is in the inner city and the remaining 17% is in the West of Hanoi. International operators will dominate the market, accounting for 87% of future supply.
Notable players in the serviced apartment market include The Ascott, Lotte Group, Parkroyal Serviced Suites Hanoi, Shilla Hotels & Resorts, Hilton and Hyatt.
Ha Anh
Source: https://doanhnghiepvn.vn/kinh-te/bat-dong-san/nhu-cau-can-ho-se-tang-truong-manh-theo-nguon-von-fdi/20250213104533637
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