APARTMENT

With limited stock any fresh supply has been quickly absorbed, 83% for the quarter. In the near future strong supply will equalize the current imbalance

Troy Griffiths, Deputy Managing Director

Primary apartment supply in Q1/2022 was 4,050 units, decreasing -48% QoQ and -18% YoY. Grade C apartment has 74% of the primary supply, followed by Grade B with 23%. Absorption was the highest in five quarters at 75%, and new supply was 83% absorbed. Average price decreased -14% QoQ to US$2,730/m2 NSA due to the temporary withdrawal of expensive on-hold projects. Real estate developers face challenges accessing funds via corporate bonds and bank loans due to increased restrictions and supervision.

VILLA & TOWNHOUSE

Supply level recovered following a supply shortage. The successful vaccination campaign has aided supply growth and revived sale activities. Shophouse had the highest absorption of 60%. By the end of the year, future supply will reach 1,130 dwellings/plots, 56% of which come from reputable developers, including Vingroup, Masterise Homes, Khang Dien, Keppel Land and Dai Phuc Group.

Due to the continues low supply of landed property in HCMC, demand is now being satisfied in neighbouring provinces of Dong Nai and Binh Duong

Troy Griffiths, Deputy Managing Director

RETAIL

In Q1/2022, average occupancy stayed high at 92%, decreasing -1 ppt QoQ and YoY. Renowned brands expanding supported performance. In Q1/2022, Savills surveyed vacating tenants across 27 shopping centres/retail podiums; 43% of those vacating were fashion businesses, and 25% were F&B outlets. Domestic tenants were hard hit and had 58% of the vacated area.

The recovery is in full swing. F&B is the most obvious with occupiers reporting solid trade, without masks. Elsewhere new international brands are entering. E-commerce continues to influence consumers

Troy Griffiths, Deputy Managing Director

OFFICE

Performance was stable QoQ with the average occupancy at 90% and rent at VND 716,000/m2/month. Grade A and B offices occupancy reduced by -1ppt QoQ to 93% and 87%, respectively. These drops resulted from companies downgrading and reducing office sizes. Grade C office had an active quarter, with occupancy increasing by 1 ppt QoQ to 91%. This was supported by revived demands from SMEs after the disruption caused by the pandemic. Overall, office market rent was unchanged QoQ and YoY.

The post-lockdown market is resilient with high demand and low supply. Hybrid office are becoming increasingly popular, that are now a viable and cost-effective solution. Tenants from the IT sector are the most active, seeking offices across all grades. Despite a supply shortage, rents are unlikely to increase as small office absorption is slowing down.

Tu Thi Hong An, Director of Commercial Leasing, Savills HCMC

APARTMENT

In 2022, 32 new projects and the next phases of two projects will add 23,300 units. Grade B will account for 70% of the upcoming supply. With large banks, five upcoming suburban districts, Hoai Duc, Dong Anh, Thanh Tri, Gia Lam, and Dan Phuong, will contribute 24% of future supply.

Ha Noi’s apartment prices are set to benefit from infrastructure upgrades. Secondary price of projects close to Metro stations surged by up to 18% QoQ.

Following a soft quarter, Ha Noi’s apartment market is expected to bounce back quickly. Decentralised infrastructure improvements will support real estate development.

Ms Do Thu Hang, Senior Director, Advisory Services, Savills Ha Noi

VILLA & TOWNHOUSE

Villa and Townhouse’s primary stock increased 35% QoQ but decreased -24% YoY. Stock was equally distributed throughout the city. Supply in 2022 will come from five new projects; 69% will come from the next phases of existing projects. Until the end of the year, more than 1,600 dwellings from ten projects will enter, 60% will be in Hoai Duc and Ha Dong will have 13%.

The prospect of price increases and inflationary pressure, against restricted lending may slow performance in the short term.

Matthew Powell, Director, Savills Ha Noi

RETAIL

In Q1/2022, supply and average rent increased. However, occupancy decreased by -2 ppts compared to last year. The reopening of borders in mid-March has boosted the economy and resulted in retail sales growing by 9.1% year-on-year (YoY). GDP is expected to rebound to 6.5% this year.

Luxury retail brands are seeking sites in Hoan Kiem, which is pushing up ground floor rent in the area. However, mid-end retail brands are still cautious about expanding after Covid-19. The growth of e-commerce is undoubtedly impacting traffic in shopping malls.

Ms Hoang Nguyet Minh, Senior Director, Commercial Leasing, Savills Ha Noi

OFFICE

Supply office rent in Q1/2022 increased by 8% YoY, with Grade B accounting for 50%. Average gross rent dropped by -1% YoY due to the introduction of new supply with low rent prices. Occupancy increased by 2 ppts this quarter, thanks to Grade A and Grade B improvements. Grade C office had the highest occupancy of 90%, mainly in western Ha Noi due to the numerous ICT and manufacturing tenants.

Tenants will have choices of new high-quality Grade A office properties entering from the end of the year, mostly in CBD and Mid-town. New properties will compete with existing buildings in terms of quality, services, and pricing.

Ms Hoang Nguyet Minh, Senior Director , Commercial Leasing, Savills Ha Noi.