The overall Vietnam property market is trending upward, across all sectors, with a particularly positive outlook for the office market.
According to the report of Savills, an established real estate consultancy firm, on the Asia-Pacific investment in the third quarter of 2017, Vietnam continued to see strong interest from developers for large scale mixed-use projects with a residential component in major cities. In September, VinaLand Limited, the real estate investment fund by Vietnam-based asset manager VinaCapital, transferred their stake in VinaSquare, a mixed-use 3.1-hectare development site, in a prime District 5 location in Ho Chi Minh City, to Tri Duc Real Estate for a total consideration of US$41.2 million.
In addition, their 182 hectare My Gia project, one of the largest township projects in Nha Trang, Central Vietnam, also changed hands for over US$11 million from VinaLand to a local developer.
In August, Anpha Holdings, a Vietnamese real estate development firm, acquired Novaland’s 99.98 per cent stake in Nova Galaxy, a subsidiary of the listed developer. Galaxy 9 project, located in District 4, Ho Chi Minh City with over 500 apartments, is part of this recently acquired company.
In Hanoi, Growing Sun Investment picked up the prime 4.2-hectare Diamond Rice Flower complex project from Kinh Bac City Group, a well-known listed company. Similarly, FLC Group, won the bid for the land use rights of the 6.4-hectare DM1 land plot, located in Nam Tu Liem District, for nearly US$38 million, to build townhouses, villas and apartments.
The report shows that the overall Vietnam property market is trending upward, across all sectors, with a particularly positive outlook for the office market.
Despite an eight per cent increase Year-over-Year in new supply, in the third quarter of this year, Ho Chi Minh City continued its robust trend with high average occupancy at approximately 95 per cent and average grade A rents up eight per cent, compared to the same period of last year.
Hanoi has also started to catch up with significant improvements in net effective rents and occupancy rates for Grade A and B buildings. The total office stock in Hanoi was approximately 1.6 million square meters with occupancy rates at 93 per cent, an increase of six per cent year-over-year. Market rental rates for both Grade A and Grade B have increased slightly at approximately two per cent and nine per cent, respectively, compared to the second quarter of this year.
With continued strong demand on the back of healthy Foreign Direct Investment (FDI) and robust Gross Domestic Product (GDP) growth, Savills forecasts an extremely low vacancy rate across all office grades and an average rental growth of approximately 8.4 per cent per annum for Vietnam in the next three years.
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