According to the latest data from the Foreign Investment Agency, in the first 10 months of 2022, FDI disbursement reached US$17.45 billion, up 15.2% over the same period last year. This is the highest amount of FDI capital realized in 10 months in the past 5 years.
Real estate continued to rank second in the list of industries attracting FDI with over US$3.87 billion, accounting for 17.2% of total registered investment capital.
GDP recorded by the end of September 2022 increased by 8.83% over the same period last year, the highest increase of 9 months in the past ten years, putting Vietnam among the fastest-growing countries in the world.
1. Apartment
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% QoQ and 15% YoY, with supply mainly from Nam Tu Liem, Hoang Mai, and Gia Lam districts. Mid-end apartments account for 84% of the total supply this quarter, other segments are affordable 12%, and high-end 3%. There is no supply for the luxury and super luxury segments. Some projects include Hanoi Melody Residence, Khai Son City, Grand Sunlake, and MHD Trung Van.
Credit control also 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% QoQ. To adapt to the current situation, developers have offered easier payment terms with large discounts or attractive promotions to customers to increase market demand.
The average primary selling price reached about US$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: > US$10.000/sqm
- Luxury: US$4.500 – US$10.000/ sqm
- High-end: US$3.000 – US$4.500/ sqm
- Mid-end: US$1.500 – US$3.000/ sqm
- Affordable: < US$1.300/ sqm
2. Townhouses
New supply of townhouses in Hanoi dropped significantly in Q3, only 625 units were launched, halving in comparison to Q2 but still up 4.6% YoY. The total number of units sold is about 374 units. Leading Hanoi's new supply are Me Linh with 50% and Gia Lam with 26% with notable projects such as HUD Me Linh Central and Highway5 Residence.
The average primary price was recorded at US$6,800 per square meter of land, down 0.2% QoQ and up 43.3% YoY. 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.
3. 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 22,350sqm from the Epic Tower project (19 Duy Tan, Nam Tu Liem), 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 US$34/sqm/month for Grade A, and US$20/sqm/month for Grade B.
The market witnessed a positive absorption volume of 40,000 sqm in the first half of the year 9 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 West area.
In the next 3 years, the Hanoi office market will witness a series of new office projects in the west 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).
4. 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 reaching 1,25 million sqm. The average rental price of was US$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 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).
5. Industrial and logistics market in 7 key Northern provinces including Hanoi, Bac Ninh, Hai Phong, Vinh Phuc, Hung Yen, Hai Duong, and Quang Ninh
With strong FDI inflows and mature infrastructure, the northern provinces 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). Land rent in Q3 2022 has increased by 2% compared to the previous quarter, reaching US$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% YoY at 86%. In contrast, ready-built warehouse supply increased by 9.3% QoQ to 1,818,000 sqm, of which warehouse absorption rate increased 2% QoQ and decreased 15% YoY, at 78%. The average asking price for the factory is US$4.6 /sqm/month and the warehouse is US$4.5 /sqm/month, respectively.
