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Serviced apartments see strong growth in Hanoi, face challenges in HCMC

Published

2 weeks ago

February 26, 2025

The serviced apartment market in Hanoi experienced significant growth in 2024, driven by strong foreign direct investment (FDI) flows, while it faced challenges from declining FDI and increasing competition in Ho Chi Minh City.

A serviced apartment at the SwissBelresidences Hanoi project by Swiss-Belhotel International. Photo courtesy of Epic Tower.

In 2024, Vietnam attracted a total of $38.2 billion in registered FDI. The FDI disbursement reached $25.4 billion, a 9% year-on-year increase and an all-time high.

The influx of FDI led to a substantial number of foreign experts and workers living and working in Vietnam, boosting the growth of serviced apartments, particularly in Hanoi and HCMC.

However, this segment showed contrasting trends in the two major cities.

According to a Savills Vietnam report, the total serviced apartment supply reached 6,246 units from 64 projects, maintaining stability quarter-on-quarter and increasing by 3% year-on-year, after the SwissBelresidences Hanoi project began operation in Q3/2024.

Occupancy rates rose 2 percentage points quarter-on-quarter and year-on-year to 84%. In particular, A- and B-grade apartments had higher occupancy rates quarter-on-quarter, while C-grade ones saw a 2-percentage-point decline.

Average rent climbed by 1% quarter-on-quarter and 2% year-on-year, reaching nearly VND600,000 ($23.5) per square meter per month. Grade C was the only segment to experience a decrease in rental prices.

In 2024, Hanoi attracted $2.2 billion in FDI from 293 newly registered projects, a 30% surge from the same period of 2023, ranking fifth in the country, after Bac Ninh, Hai Phong, HCM, and Quang Ninh.

The capital city also approved the planning of three new industrial parks (IPs) in Thuong Tin and Soc Son districts, covering a total area of 600 hectares. These include Bac Thuong Tin IP (137 hectares), Phung Hiep IP (175 hectares), and Soc Son IP (324 hectares). Ten existing IPs span 1,300 hectares, nine of which are fully occupied.

The expansion of industrial parks is expected to attract more tenants into the serviced apartment market, particularly foreign experts, engineers, and technicians.

Regarding future supply, Savills expected from this year, Hanoi will have 17 new projects with 4,077 units to be launched.

In 2025 alone, seven projects will provide 2,889 units, with the West Lake View Complex projected to add the largest supply of A-grade units. One project in Tay Ho district is expected to add 162 units by 2026. Up to 83% of future supply will be in the inner city, while the remaining 17% will be in the western area.

International operators continue to dominate Hanoi’s market, with 87% of future supply. Notable market players include The Ascott, Lotte Group, Parkroyal Serviced Suites Hanoi, Shilla Hotels & Resorts, Hilton, and Hyatt.

Matthew Powell, director of Savills Hanoi, said he believed that the development of industrial parks, along with strong FDI flows, has been a key driver of the serviced apartment demand growth.

Challenges from declining FDI, competition in HCMC

Meanwhile, in HCMC, in Q4/2024, the supply of serviced apartments decreased by 3% quarter-on-quarter but remained stable year-on-year, with over 8,000 units.

The quarterly decline was primarily due to the closure of 55 A-grade apartments at Indochine Park Tower and the conversion of 175 serviced apartments into hotels in two projects.

Savills forecast that the future supply of serviced apartments in the southern hub will be limited, with increasing competition from rental apartments.

By 2027, only nine projects with a total of around 700 units are expected to enter the market. Of these, B-grade apartments will account for 67% of future supply, with an average 160 units per project.

Since 2021, the situation had improved, with occupancy rates increasing by an average of 4 percentage points per year and rental prices rising 1% annually. However, in 2024, occupancy dropped by 3 percentage points year-on-year to 79%, mainly due to weaker short-term demand in Q3. Rental prices remained stable year-on-year at VND515,000 ($20.2) per sqm per month.

In Q4, rents rose 2% quarter-on-quarter and year-on-year, reaching VND522,000 ($20.45) per sqm per month. Along with the rent increase, high demand during the year-end period helped boost landlords’ confidence.

Occupancy increased by 5 percentage points quarter-on-quarter and by 1 percentage point year-on-year to 82%, thanks to demand from expatriates, international visitors, and business travelers.

There was strong consumption across all categories, with 315 units sold. B-grade apartments accounted for the largest share at 77%, driven by short-term demand from international visitors and business travelers, followed by C-grade with 20%, and A-grade 3%.

FDI is a key driver of accommodation demand from foreign workers in Vietnam. However, experts assessed that the slowdown in FDI growth in HCMC may pose challenges for the growth of this segment.

In 2024, registered FDI in the city reached $3 billion, a 49% plunge from the previous year. Newly registered capital was $511 million, down 15% year on year.

At the same time, the serviced apartment segment in HCMC faced direct competition from more affordable rental apartments. In Q4, serviced apartment rents were approximately 45-112% higher than those for high-end residential apartments. By 2027, more than 5,000 A- and B-grade apartments are expected to enter the market.

Su Ngoc Khuong, senior director of investment at Savills Vietnam, commented that in 2024, serviced apartments in HCMC showed an improvement in performance thanks to growth in international visitors and the year-end travel demand. However, the slowdown in FDI could affect the future prospects of this sector, he noted.

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Real estate capital heading into suburban areas

Published

2 hours ago

March 12, 2025

Industrialzone.net

The shortage of affordable apartments in Ho Chi Minh City has led buyers with tight budgets to seek properties in neighbouring markets.

The real estate market in Ho Chi Minh City is facing a scarcity of land, while the cost of project development is continuing to rise. This has forced investors to carefully consider which product segments to focus on to ensure profits.

Real estate capital heading into suburban areas

Photo: baodautu.vn

Investors with land in strategic locations close to the city centre are prioritising the development of mid-range and high-end products to optimise financial outcomes.

As a result, buyers seeking affordable options are being forced to look elsewhere.

“The shortage of affordable apartments in Ho Chi Minh City has led buyers with limited finances to seek items in neighbourhoods like Binh Duong, Dong Nai, and Long An. In these areas, apartment prices hover at around $1,200-$1,600 per square metre, creating strong demand,” said Giang Huynh, head of research and S22M at Savills Ho Chi Minh City.

From another perspective, the average rental yield for apartments in Binh Duong is currently 4.7 per cent, well above the 3.7 per cent yield in Hanoi and 3.6 per cent in Ho Chi Minh City.

Dinh Minh Tuan, southern regional director of real estate trading platform Batdongsan.com.vn, shared that the high rental yield in Binh Duong is largely due to reasonably priced luxury apartments, with high rental prices and stable occupancy rates.

On average, a luxury apartment in Binh Duong can be rented for $400-$480 per month for a one-bedroom unit, and from $600-$800 for a two- to three-bedroom unit.

Meanwhile, in Ho Chi Minh City or Hanoi, apartments in the $1,800-$2,000 per square metre range can only be rented for around $280-$480 per month, depending on the number of bedrooms, not to mention the increasingly stiff competition in enticing tenants.

In response to the strong capital shift, real estate firms in Ho Chi Minh City’s suburban areas are accelerating legal procedures to launch new projects.

This trend reflects the investors’ agility and creates attractive opportunities for both homebuyers and investors in 2025.

Accordingly, Kim Oanh Group plans to launch a 27-hectare urban area in New Binh Duong City in the first quarter of 2025.

This will be the first project the company has collaborated on with Surbana Jurong, a partner from Singapore, under EDGE green standards.

The project features 1,656 townhouses and terraced houses, and 1,666 social apartments, priced from $28,000 per unit.

Major developer Phat Dat Real Estate Development Corporation plans to launch two major projects, Thuan An 1 and 2 in Binh Duong province, covering a total area of 4.46 ha.

The 1.8ha Thuan An 1 will provide 2,604 apartments and shophouses, while the 2.66ha Thuan An 2 will have 3,270 apartments and 16 townhouses. These projects are located on key roads.

Simultaneously, southern developer An Gia Group plans the launch of 3,000 apartments at The Gio Riverside and 76 shophouses in Di An city.

The three-hectare project, located on the provincial route DT16, offers nicely designed apartments with one to two bedrooms.

Regarding opportunities for homeownership, Phan Cong Chanh, an expert in real estate investment, noted that owning a home requires solid knowledge and time to raise financial resources.

For young people, buying a home immediately is a challenge due to limited finances.

Buyers can explore financial support packages and use leverage to shorten the time needed to purchase real estate. This needs to be accompanied by a reasonable plan to ensure long-term affordability.

“Overall, owning a home is not just a purchasing decision; it also requires a smart financial strategy. Whether choosing to buy immediately, rent, or invest in real estate in any segment, individuals must consider their financial conditions and personal plans carefully,” said Chanh.

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VinFast looks to long term with operational roadmap

Published

4 hours ago

March 12, 2025

Industrialzone.net

Carmaker VinFast aims to become a powerhouse in the electric vehicle market as it grapples with tougher competition abroad.

VinFast looks to long term with operational roadmap

The company wants to double EV sales when compared to last year’s figure

Potential investment from JTA Investment through an MoU between Vingroup and Qatar Investment Fund, which was unveiled last week, aligns perfectly with VinFast’s ambitious vision of scaling up production and sales in a competitive international market, the company said.

JTA Investment is exploring a potential equity investment of at least $1 billion in VinFast, the Nasdaq-listed EV manufacturer, as well as a strategic partnership aimed at supporting the company’s global expansion and technological development.

“This collaboration will unlock significant opportunities for Vingroup and its subsidiaries to drive technological, infrastructural, and sustainable economic advancement in Vietnam, while establishing a foundation for international expansion,” said Le Thi Thu Thuy, vice chairwoman of Vingroup.

Global electric vehicle (EV) competition is expected to get tougher as the demand for EVs is projected to increase further this year, but the outlook is being hindered by uncertainty surrounding tariffs and policy changes.

In 2025, S&P Global Mobility projects that 15.1 million battery EVs will be sold worldwide, a 30 per cent increase on last year. It is anticipated that 16.7 per cent of the light vehicle market will be made up of battery-based EVs.

S&P also reported that major unknowns await Chinese manufacturers BYD and Tesla in 2025 due to assumed changes to the US Inflation Reduction Act.

Last year, VinFast stated that it was delaying the opening of its North Carolina factory until 2028, which will allow the company to optimise its capital allocation and manage short-term spending more effectively, focusing more resources on supporting near-term growth targets and strengthening existing operations.

The company is expanding its strategy in India, Indonesia, and the Philippines, where EV infrastructure is developing rapidly but competition from domestic brands is limited. Experts said that in order to sustain long-term growth, it needs to compete with Chinese manufacturers and prove its competitiveness beyond its home market.

VinFast is scheduled to open factories in Subang, West Java and in the southern Indian state of Tamil Nadu this year. The plan to expand into India aims to seize growth opportunities in the world’s most populous nation and rapidly expanding EV market.

On February 28, VinFast and Motech Automotive Service Centres, through its franchisor and operator in the Philippines, signed an MoU on expanding the service network for VinFast’s EVs in the market. The agreement aims to meet the increasing demand for EVs among Filipino consumers, while affirming VinFast’s long-term commitment and determination to utilise green transformation across the region.

VinFast and Motech will collaborate to accredit over 60 Motech service workshops as approved VinFast service centres. In the Philippines, these service centres will have the authority to handle VinFast EV maintenance, warranties, and repairs. This year, VinFast intends to open over 100 similar service workshops throughout the Philippines.

In 2025, the company has set the ambitious target of doubling sales to around 200,000 EV globally after announcing impressive results in 2024, with 97,300 EVs sold globally, of which about 87,000 vehicles came from the domestic market.

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M&As in crucial sectors poised for rapid expansion

Published

6 hours ago

March 12, 2025

Industrialzone.net

Following the downturn, Vietnam’s merger and acquisition landscape is set to gain momentum in 2025, driven by spearhead industries from technology to manufacturing. Julien Curtet, partner of Index Partners, shared with VIR’s Thanh Van his insights into the overview and the prospect of the market.

How do you see Vietnam’s merger and acquisition (M&A) market affected by global market volatility?

M&As in crucial sectors poised for rapid expansion

Julien Curtet, partner of Index Partners

In 2024, global M&A activity rebounded, reaching approximately $3.5 trillion (a 15 per cent increase from 2023) with around 7,500 deals above $30 million. Corporate acquisitions rose by 12 per cent, and financial investor activity surged by 29 per cent, driven by private equity amid easing interest rates. Key sectors included technology, energy, financial services, and telecom.

Vietnam mirrored global trends with notable M&A activity in technology, energy, and industrial sectors, supported by a resilient macro and rising foreign investment.

In 2024, Vietnam’s M&A market experienced a downturn in transaction value, influenced by global economic uncertainties stemming from geopolitical tensions and currency fluctuations. However, deal volume reached around 160 transactions in the second half of 2024, marking a 25 per cent rise from the first half of 2024 and a 32 per cent jump from the second half of 2023, signalling a strong recovery trend and positive momentum for future growth. Some key deals in the second half of 2024 were Masan’s acquisition of an additional 7.1 per cent stake of VinCommerce from SK Group for $200 million, KIDO’s acquisition of Hung Vuong, Nvidia’s acquisition of VinBrain, and SK Group’s $300 million acquisition of Iscvina Manufacturing.

Mid-cap deals up to $25 million dominated Vietnam’s M&A market, accounting for just over half of total deal volume despite a 28 per cent drop in total transaction value. Mid-size transactions in the second half of the year included ADA’s acquisition of Customore and Elan’s $8.89 million acquisition of TMC Vietnam.

Could you shed light on some key drivers for the Vietnamese market in 2025 and beyond?

In 2025, it is set for strong growth, driven by key sectors such as infrastructure, technology, consumer, and manufacturing. Infrastructure will see a surge in investment, particularly in transportation and logistics, supported by government initiatives.

The technology sector is poised for rapid expansion, fuelled by favourable policies and accelerating digital transformation. Consumer spending is expected to rebound from a low base, signalling a recovery in the consumer sector.

Meanwhile, the manufacturing sector, which contributed over one-quarter of GDP in 2024, is projected to grow by 10 per cent in output, supported by new industrial zones and increased foreign investment.

The market is set to accelerate in the second half of 2025, fuelled by stable global interest rates and rising investor confidence.

Vietnam’s strong economic momentum, pro-investment policies, and booming sectors like technology, manufacturing, infrastructure, and recovery of consumer will drive deal activity, cementing its status as a key M&A hub in Southeast Asia.

How do foreign dealmakers approach strategies amidst global economic uncertainty, especially tariffs and new US policy?

Foreign dealmakers are reshaping their M&A strategies. Despite the challenges, Vietnam remains a key destination for cross-border investment, driven by its rapidly expanding technology, consumer, and manufacturing sectors.

Vietnam is rapidly advancing its technology sector, emerging as a significant player in the global digital landscape. Its commitment to technological innovation is evident through key partnerships, such as the collaboration with Nvidia to establish AI research and data centres in the country.

To further entice high-tech investments, the government offers substantial incentives, including up to four years of tax exemptions and a 50 per cent tax reduction for the subsequent nine years, as well as financial support from national sci-tech development funds.

Additionally, Vietnam’s consumer market is expected to recover in 2025, fuelled by a rising population, and increasing disposable incomes, boosting demand for goods and services. With consumer confidence rebounding and spending accelerating across sectors, Vietnam’s consumer market is regaining momentum as a vital driver of economic growth.

Vietnam is emerging as a manufacturing and logistics hub, attracting foreign investments due to its competitive labour costs (20–50 per cent lower than regional peers) and a 9.8 per cent increase in manufacturing output in 2024. An “anything but China” strategy is driving multinationals to shift production to Vietnam.

The country is also benefiting from major infrastructure projects, including the Long Thanh International Airport and deep-sea ports in Haiphong, are strengthening its logistics position, while expanding industrial areas and cross-border e-commerce fuel growth in both sectors.