According to Savills' report on Hanoi real estate market in the fourth quarter of 2018, the new retail projects increase rent. The total stock was approximately 1.4 million square meters, up three per cent quarter-on-quarter (QoQ) and six per cent year-on-year (YoY) after the entry of three shopping centers in the secondary area.
Average ground floor gross rent continued its upward trend of three per cent QoQ and 17 per cent YoY whilst occupancy was slightly down 3 ppts QoQ and 4 ppts YoY. The retail podium segment had the most improved performance.
Sixteen new projects are expected to launch in 2019, providing nearly 285,000 square meters, including projects with a substantial scale of nearly 100,000 square meters each.
Meanwhile, the stock of the Hanoi office market was stable QoQ at nearly 1.7 million square meters. Grade A supply remained unchanged whilst grade B welcomed two new buildings.
Overall market performance remained stable QoQ and YoY, the most significant change was a three per cent YoY increase in average gross rent. Improved grade A performance in non-CBD areas resulted in an upward trend overall despite a slight QoQ reduction in CBD rent. Savills' report shows that there will be a new supply of approximately 500,000 square meters until 2020. Five grade A office projects are expected to enter in 2019.
It is also noticeable that the apartment segment supply breaks the record with eight new projects and the next phases of 28 projects provided approximately 15,100 units, up approximately 120 per cent QoQ and YoY.
Transactions rose by 81 per cent QoQ and 69 per cent YoY whilst the absorption rate increased by nine ppts QoQ and five ppts YoY to 34 per cent. The average asking price was $1,370 per square meter, up three per cent QoQ and 10 per cent YoY. Grade B accounted for 61 per cent of stock, followed by grade C with 31 percent.
According to Savills, more than 41,300 units will enter from 36 apartment projects in 2019, most will be grade B.
Despite a one per cent QoQ and YoY decrease due to the withdrawal of one 3-star hotel, three new four- to five-star hotels are expected to supply approximately 480 rooms in 2019.
Last year, four new villa projects and nine new phases supplied nearly 2,350 dwellings. Transactions increased 21 per cent YoY and absorption was 40 per cent, up 3.8 ppts YoY. Gia Lam led with 52 per cent of sales, followed by Dong Anh and Long Bien with nine percent each.
Savills says that projects including Athena Fulland by Vimedimex, Sunshine Wonderland by Sunshine Group and Vincity Sportia by Vingroup will enter in 2019.
Meanwhile, the grade B serviced apartment projects showed a decline last year. A total of 48 properties provided 4,600 units due to a new grade A project and the closure of two grade B projects. Savills estimates that 1,100 units from nine projects will enter from 2019 - 2020.
