Serviced apartments for rent in Hanoi cost up to 190 million VND per month

A recent report by real estate services firm Avison Young shows that rental prices and occupancy rates of serviced apartments in Hanoi have tended to increase in the first half of this year. Accordingly, class A serviced apartments are being rented for an average of about 31.9 USD (about 800,000 VND) per square meter per month. At this level, the lowest monthly rental price is from 39 million VND, the highest is up to 190 million VND per apartment. Meanwhile, class B segment is from 16.4 million VND per apartment per month.

Serviced apartments are classified based on a number of criteria such as location, amenities, equipment, accompanying services and security systems. Basically, a class A apartment will meet the evaluation criteria equivalent to a 5-star hotel, while class B is equivalent to 4 stars, according to Avison Young.

Mr. David Jackson, General Director of Avison Young Vietnam, said that the rental price of 190 million VND per month belongs to an apartment in a class A project located on Lieu Giai Street, Ba Dinh District. This is an apartment with an area of ​​up to 280 m2, 4 bedrooms. Tenants can use many amenities in the project such as restaurants, rooftop gardens, shopping malls, fitness centers, bars, etc. In addition, a project on Phan Chu Trinh Street, Hoan Kiem District also recorded a rental price of up to 150 million VND per month.

Data from real estate consultancy Savills also shows that in the second quarter, rental prices in this apartment segment increased by 4% quarter-on-quarter and 5% year-on-year, reaching an average of VND600,000 per square meter per month. The occupancy rate also increased slightly, reaching 83%.

Explaining the above developments, according to Mr. Matthew Powell - Director of Savills Hanoi, foreign capital flowing into Vietnam has attracted many international experts to work, creating a key customer segment for the serviced apartment market.

In the first 6 months of this year, Vietnam attracted nearly 15.2 billion USD of FDI capital, the highest level in half a year in the 5-year period. Hanoi alone attracted more than 1.1 billion USD of foreign capital, of which 120 newly registered projects with more than 1 billion USD. In addition, in the first 5 months of the year, more than 2,500 foreign managers, executives, and experts worked and lived in the capital, according to data from the Hanoi Department of Labor, War Invalids, and Social Affairs.

"They often choose to rent apartments managed and operated by international units that meet requirements for quality and amenities," he said.

On the other hand, the development of infrastructure also increases the attractiveness of this segment. According to Savills experts, Hanoi plans to accelerate the implementation of many important projects such as Thuong Cat Bridge, Van Phuc Bridge across the Red River, the eastern access road of Phap Van - Cau Gie Expressway and the road connecting My Dinh - Ba Sao - Bai Dinh. These routes are expected to shorten the travel time from the center, where many serviced apartments are concentrated, to neighboring industrial parks.

Mr. Matthew Powell looked at the demand between different types of apartments. For example, 2-bedroom apartments are the most popular in the central area, accounting for nearly 60% of demand. Meanwhile, in the western area, most tenants choose small apartments such as studios or one bedrooms.

Prices and rental rates for this type of apartment also tend to increase in the context of scarce new supply. Avison Young said that in the first 6 months of the year, Hanoi had no new supply. By the end of the second quarter, the market had about 3,400 apartments, most of which were class A. The occupancy rate in this segment increased by 4% in the second quarter, reaching 86%, while class B was at 75%. The segment with many tenants is in the price range of 47-81 million VND per apartment per month.

However, the supply of serviced apartments for rent is expected to increase in the coming time. According to Savills Hanoi, in the second half of this year, the market will have 227 more apartments in Cau Giay and Tay Ho. Meanwhile, Avison Young forecasts that in the next two years, there will be more than 3,100 Class A apartments launched on the market. The new basket of products is mainly operated by international units such as Ascott, Parkroyal Serviced Suites or Shila Hotels & Resorts. Tay Ho District will concentrate nearly 70% of the future supply, equivalent to 2,100 apartments.