Hanoi Q3 property market landscape

By Cushman & Wakefield
Fri, November 4, 2022 | 12:15 pm GMT+7

Property consultancy Cushman & Wakefield offers an insight into the landscape of Hanoi's real estate segments in the third quarter.

High-rise apartment buildings in Hanoi. Photo courtesy of Vietnam News Agency.

High-rise apartment buildings in Hanoi. Photo courtesy of Vietnam News Agency.

Real estate continued to rank second in the list of industries attracting foreign direct investment with over $3.87 billion in registered capital during Jan-Oct, accounting for 17.2% of the country's total.

In the period, FDI disbursement reached $17.45 billion, up 15.2% year-on-year. This is the highest amount of FDI capital realized in 10 months in the past five years, Foreign Investment Agency data shows.

GDP recorded by the end of September 2022 increased by 8.83% over the same period last year, the highest increase of nine months in the past 10 years, putting Vietnam among the fastest growing countries in the world.

Apartments

The supply of apartments in the inner-city districts is getting limited as the project approval process is increasingly difficult. As a result, the supply of new apartments in Q3 reached just over 3,000 units, down 38% quarter-on-quarter and 15% year-on-year, with supply mainly from Nam Tu Liem, Hoang Mai, and Gia Lam districts.

Mid-end apartments accounted for 84% of the total supply in Q3, affordable apartments 12%, and high-end units 3%. There was no supply for the luxury and super luxury segments.

Credit control made it difficult to disburse loans to customers, leading to sales and absorption rates decreasing in the quarter, with 4,600 units sold, down 15% quarter-on-quarter. To adapt to the current situation, developers offered easier payment terms with large discounts or attractive promotions to customers to increase market demand.

The average primary selling price reached about $1,858 per square meter, down 3.1% from the previous quarter. According to Cushman & Wakefield's estimation, there will be about 103,000 new apartments for sale from Q4/2022 to 2025.

Classification of apartments in Hanoi: super luxury apartments are those priced at more than $10,000/sqm; luxury $4,500-10,000/sqm; high-end $3,000-4,500/sqm; mid-end $1,500-3,000/sqm; affordable over $1,300/sqm.

Townhouses

New supply of townhouses in Hanoi dropped significantly in Q3 with only 625 units launched, halving in comparison to Q2 but still up 4.6% year-on-year.

The total number of units sold is about 374. Leading Hanoi's new supply were Me Linh district with 50% and Gia Lam district with 26% with notable projects like HUD Me Linh Central and Highway5 Residence.

The average primary price was recorded at $6,800/sqm of land, down 0.2% quarter-on-quarter and up 43.3% year-on-year. Investors are becoming more cautious in investing and buying real estate due to a lack of liquidity and loans.

Cushman & Wakefield estimates the total supply of townhouses in the future in Hanoi will reach 12,000 units. Notable projects in the implementation process from Q4/2022 include Sunshine Heritage Resort, Hana Garden Homes, and Will State.

Office

The demand for office space is inherently tied to the economy. Economic growth means more jobs are created, which in turn drives more demand for all types of spaces for workers, including offices.

The market recorded a new supply in Q3 of 22,350 sqm from the Epic Tower project (19 Duy Tan street, Nam Tu Liem district), bringing the total supply of Grade A and B in Hanoi to a total of 1.65 million sqm of office space.

Office rents in the whole market increased slightly at $34/sqm/month for Grade A, and $20/sqm/month for Grade B.

The market witnessed a positive absorption volume of 40,000 sqm in the first nine months of 2022, coming from companies in the fields of insurance (25%), manufacturing and manufacturing (25%), technology (20%), services (10%) and logistics (5% ), mainly concentrated in the buildings on the edge of the center and the western area.

In the next three years, the Hanoi office market will witness a series of new office projects in the western and central areas, namely Techcombank Tower (36,300 sqm), Lancaster Luminaire (21,500 sqm), BRG Diamond Park Plaza (33,800 sqm), Lotte Mall Hanoi (41,000 sqm), and Landmark 55 (60,000 sqm).

Retail

The retail market in Hanoi has recovered and returned to the growth trajectory of the pre-pandemic period. The occupancy rate of the whole market reached 89%, with the total accumulated supply of shopping malls, department stores, and commercial podiums reached 1.25 million sqm.

The average rental price of was $39/sqm/month, up 1.09% compared to the previous quarter and the same period last year.

According to Cushman & Wakefield, 75% of future retail space will be allocated in the west and central fringes. Some notable projects are the Hinode City in Hai Ba Trung district (20,762 sqm), Lancaster Luminaire in Dong Da district (5,631 sqm), The Zei in Nam Tu Liem district (9,000 sqm), Lotte Mall Hanoi in Tay Ho district (72,000 sqm), AEON Mall Giap Bat Hoang Mai district (84,000 sqm), and BRG Park Residence Thanh Xuan district (13,945 sqm).

Industrial, logistics real estate

With strong FDI inflows and mature infrastructure, the seven northern provinces Hanoi, Bac Ninh, Hai Phong, Vinh Phuc, Hung Yen, Hai Duong, and Quang Ninh, have always been the focal point for industrial investors.

The total accumulated supply of industrial land in the whole market reached 13,600 hectares with a new project recorded as an expanded Phuc Dien Industrial Park (172 ha) in Hai Duong province.

Land rent in Q3/2022 increased by 2% compared to the previous quarter, reaching $111/sqm/lease term and the occupancy rate reached over 80%.

According to our estimation, future supply will be an additional 17,000 hectares with the region's emerging manufacturing centers in Hai Duong, Hung Yen, Bac Giang and Bac Ninh.

The ready-built factory market saw no significant change in new supply at 2,534,000 sqm, with the absorption rate down 6% year-on-year at 86%. In contrast, ready-built warehouse supply increased by 9.3% quarter-on-quarter to 1,818,000 sqm, of which warehouse absorption rate increased 2% quarter-on-quarter and decreased 15% year-on-year, at 78%.

The average asking price for the factory is $4.6/sqm/month and the warehouse is $4.5/sqm/month, respectively.

Comments (0)
  • Read More
Vietnam’s benchmark VN-Index to reach 1,400-1,420 points in 2025: broker

Vietnam’s benchmark VN-Index to reach 1,400-1,420 points in 2025: broker

The VN-Index, representing the Ho Chi Minh Stock Exchange (HoSE), may hit 1,400-1,420 points in 2025, driven by an 18% market-wide profit growth and a price-to-earnings (P/E) ratio of 12.5-13x, according to broker MBBank Securities (MBS).

Finance - Sun, December 22, 2024 | 7:52 pm GMT+7

HCMC's first metro line officially operational after nearly 2 decades

HCMC's first metro line officially operational after nearly 2 decades

The first urban railway line in Ho Chi Minh City, named Ben Thanh-Suoi Tien, officially started commercial operations on Sunday after nearly two decades of waiting.

Infrastructure - Sun, December 22, 2024 | 2:17 pm GMT+7

Vietnam's 2025 GDP to grow 6.5% on robust infrastructure investment, consumer spending recovery: VinaCapital

Vietnam's 2025 GDP to grow 6.5% on robust infrastructure investment, consumer spending recovery: VinaCapital

Domestic factors, including a ramp-up in Government infrastructure spending, a revival of the real estate market, and a recovery of consumer spending, will help sustain Vietnam's GDP growth at a circa 6.5% pace next year, in-line with the National Assembly’s official target and with 2024 GDP growth, write Michael Kokalari, chief economist at VinaCapital.

Consulting - Sun, December 22, 2024 | 2:00 pm GMT+7

Vietnam shipping, seaport stock rally driven by rosy outlook in 2025

Vietnam shipping, seaport stock rally driven by rosy outlook in 2025

Many shipping and port stocks have risen sharply since November on an optimistic outlook for the industry driven by increasing throughput and a shift in container shipping alliances in 2025.

Companies - Sun, December 22, 2024 | 10:00 am GMT+7

Singapore’s Platinum Victory seeks to raise stake in Vietnam’s REE to nearly 45%

Singapore’s Platinum Victory seeks to raise stake in Vietnam’s REE to nearly 45%

Singaporean fund Platinum Victory Pte. Ltd. has registered to buy another 16.8 million shares in Ho Chi Minh City-based utility firm Refrigeration Electrical Engineering Corporation (REE), aiming to increase its ownership to nearly 45%.

Finance - Sun, December 22, 2024 | 9:29 am GMT+7

1.8 km road connecting Lach Huyen Port terminals to be built in northern Vietnam

1.8 km road connecting Lach Huyen Port terminals to be built in northern Vietnam

The Hai Phong Economic Zone Management Board has taken a significant step forward in enhancing infrastructure around Lach Huyen Port by establishing a council to appraise the environmental impact assessment for the road connecting terminals No. 3 to No. 6.

Economy - Sun, December 22, 2024 | 8:00 am GMT+7

Hanoi TikToker internationally wanted for involving in multi-billion-dollar scam

Hanoi TikToker internationally wanted for involving in multi-billion-dollar scam

Hanoi police have issued an international arrest warrant for Le Khac Ngo, known as "Mr. Hunter," a key accomplice in a recently-dismantled massive foreign exchange and securities fraud ring.

Society - Sat, December 21, 2024 | 10:57 pm GMT+7

Unlocking Phu Quoc’s potential to become the 'Hawaii of the East'

Unlocking Phu Quoc’s potential to become the 'Hawaii of the East'

Leading global tourism companies have remarked that Phu Quoc has "yet to receive the recognition it deserves," despite its impressive and unexpected growth rate.

Travel - Sat, December 21, 2024 | 7:20 pm GMT+7

Thai central bank maintains policy interest rate at 2.25%

Thai central bank maintains policy interest rate at 2.25%

The Thai Chamber of Commerce (TCC) has said it backs the decision by the Bank of Thailand, the country's central bank, to maintain the policy interest rate at 2.25%, considering the move as suitable for a reviving economy.

Southeast Asia - Sat, December 21, 2024 | 5:43 pm GMT+7

Vietnam's military-run tech giant Viettel strikes big deals at international defence expo

Vietnam's military-run tech giant Viettel strikes big deals at international defence expo

Subsidiaries of Military Industry and Telecommunications Group (Viettel) signed a string of significant contracts with major global partners during the first two days of the Vietnam International Defence Expo 2024 in Hanoi.

Companies - Sat, December 21, 2024 | 5:36 pm GMT+7

Taiwan’s Wistron acquires 37ha land lot in northern Vietnam for expansion

Taiwan’s Wistron acquires 37ha land lot in northern Vietnam for expansion

Taiwan-headquartered Wistron, a top electronics provider and an Apple supplier, will further its investment in Vietnam’s northern province of Ha Nam by acquiring another 37.1-hectare land lot.

Companies - Sat, December 21, 2024 | 2:08 pm GMT+7

VAFIE seeks to promote sci-tech development, intellectual property policies

VAFIE seeks to promote sci-tech development, intellectual property policies

The Vietnam’s Association of Foreign Invested Enterprises (VAFIE) aims to enhance policies for the development of science, technology, and intellectual property, creating a more conducive investment environment.

Companies - Sat, December 21, 2024 | 1:59 pm GMT+7

Vietnamese dong likely to depreciate 3% in 2025: VinaCapital

Vietnamese dong likely to depreciate 3% in 2025: VinaCapital

The Vietnamese dong is likely to depreciate 3% in 2025 on anticipation that the US Dollar/DXY Index will finish 2025 nearly unchanged, says Michael Kokalari, chief economist at Vietnam's leading fund manager VinaCapital.

Economy - Sat, December 21, 2024 | 11:23 am GMT+7

First luxury railway journey across Vietnam features Indochine architecture

First luxury railway journey across Vietnam features Indochine architecture

PYS Travel has launched the first luxury railway journey across Vietnam named Sjourney, marking a new milestone in the railway tourism sector.

Travel - Sat, December 21, 2024 | 10:09 am GMT+7

Vietnam among 40 most beautiful countries: US publication

Vietnam among 40 most beautiful countries: US publication

Vietnam has secured the 36th position in the ranking of the 40 most beautiful countries in 2024 in a testament to its undeniable charm and appeal, according to US News & World Report.

Travel - Sat, December 21, 2024 | 10:04 am GMT+7

Foxconn to invest $16 mln more in Vietnam’s Quang Ninh province

Foxconn to invest $16 mln more in Vietnam’s Quang Ninh province

Competition Team Technology (Vietnam) Company Limited, a subsidiary of Foxconn, will invest an extra $16 million in its “S- Vietnam” project in the northern coastal province of Quang Ninh.

Industries - Sat, December 21, 2024 | 9:53 am GMT+7