In the second quarter of 2010, the Hanoi real estate market was driven by psychology of people and secondary investors, causing a surge in some market segments.
Condo market stays vibrant
In the second quarter, the primary condominium market was impressive with a supply of 4,600 new units, smaller than 5,100 units in the first quarter but double the volume in the same period of 2009 (2,100 units). In contrast, on the secondary market, asking prices increased in all segments, rising 3 % in the mid-end, high-end and luxury segments, and 9 % in the low-end segment. The highlight of this quarter is the introduction of the Decree 23/2010/NQ-CP to bring down lending rate to drop to 12-13 % from the current 14-17 % to ease financing and boost residential demand.
According to Mr Marc Townsend, General Director of CBRE Vietnam, in the coming time, the competition of investors is expected to create a more favourable environment for potential buyers.
In the meantime, the office market was lacklustre as the rent of Grade A dropped 5.9 % quarter on quarter to US$39.66 per square metre. This was the first time since the third quarter of 2007 that the overall asking rents for Grade A offices stayed below US$40 per square metre. The rents of Grade B offices stayed unchanged at US$26.42 per square metre because tenants accepted the current rate.
The vacancy rate in Grade offices in the second quarter dropped 1.75 % quarter on quarter to 7.51 % while that in Grade B offices decreased 3.32 % quarter on quarter to 18.24 %. In the second quarter, the net absorption improved significantly from the previous quarter. New Grade B leased office areas reached 16,830 square metres while Grade A leased areas were 2,036 square meters. The office demand is forecast to remain high in coming quarters but the supply will outstrip the demand. According to CBRE, there will be a little change in rents in upcoming quarters as newly established companies will seek premium office buildings with little rent fluctuations.
Southern retailers go north
With the presence of Saigon Co.opMart, the total supply of retail space in Hanoi rose 13.14 % year on year and 3.86 % quarter on quarter. Saigon Co.opmart also marked a new wave of southern retailers to make inroads into the northern market.
The retail market continued to expand in this quarter. The retail space in central business districts was leased out and rents had little changes. The rents in non-central business districts slightly rose 1.59 % quarter on quarter, mainly due to the entry of Saigon Co.opMart. Asking rents in this supermarket ranged between US$29 and US$70 per square metre a month. The average vacancy rate decreased 2.5 % quarter on quarter to 10.8 %.
Hanoi’s retail sales significantly increased 28.2 % in the first six months of 2010, showing an increased strength in consumer demand. In the second quarter, the city welcomed new famous brands making inroads. The increase in retail space sales and retail shops showed signs of potential growth of retail market in Hanoi in the coming quarters.
For serviced apartments, in the second quarter, there was no new supply and the average vacancy rate fell 0.5 % quarter on quarter to 5 %. Asking rates slightly rose 0.4 % from the previous quarter to US$30.38 per square metre.
Apart from two large-scaled serviced apartment complexes of Grand Plaza (Charmvit) and Crown Plaza expected to open this year, a new small apartment in Hoan Kiem district will be put into use in 2010. The each of the above two projects will add 100 apartments in the western submarket, along Pham Hung Road.
Luong Tuan
Vietnamese
