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PROPERTY

adapt our business processes and operations.
One significant move was the incorporation HANOI Performance
of flexibility in cancellations due to rapid Leased (LHS) Vacant Avg. rent
changes in border restrictions.” 6,000 30
According to a fourth quarter report released
by Savills on January 19, the Hanoi market 5,000 25
recorded average occupancy of 67 per cent, 4,000 20
down 2 ppts quarter-on-quarter. But the market
also witnessed the entrance of four projects 3,000 15 US$/m²/mth
last year, including one large-scale entry in 2,000 10
Gia Lam pioneering a new area of development
for serviced apartments in the capital. Three 1,000 5
long-awaited projects were opened in central 0 0
districts. The total supply of 5,380 units was 2016 2017 2018 2019 2020
up 16 per cent year-on-year.
In Ho Chi Minh City, average occupancy HO CHI MINH CITY Performance
in 2020 was down 20 ppts against 2019. Take- Leased (LHS) Vacant Avg. rent
up was negative in the first half, but 240 units 7,000 26
were taken up in the second half after priority
expats began to return. Five Grade C and one 6,000 24
Grade B projects withdrew from the market, 5,000
to upgrade or change to office space for lease. 22
The market also welcomed six new Grade C 4,000
projects, including five providing 100 units 3,000 20 US$/m²/mth
managed by CityHouse. Flexible operators 2,000
have been more successful tapping long and 18
short-term trade. Total supply is approximately 1,000
6,500 units, up 3 per cent quarter-on-quarter 0 16
and 2 per cent year-on-year. 2016 2017 2018 2019 2020
Source: Savilis Research & Consuitancy
Adapting to circumstances
Generally speaking, the serviced apartment
segment came under major pressure last year Rent reductions, meanwhile, have attracted Minh City this year - the first luxury serviced
due to the impact of Covid-19, especially as new tenants. The Savills’ report noted that residence under the Ascott The Residence
their main customers are foreigners, the average rents of $25 per sq m per month in brand in Vietnam. The other three properties
majority of whom have now gone home or Hanoi were down 2 per cent quarter-on-quar- are Somerset Feliz Ho Chi Minh City, Citadines
are unable to return. Developers and operators ter and 5 per cent year-on-year. In Ho Chi Marina Halong, and FOX Vung Tau. “We
have maintained a certain number of tenants, Minh City, average rents fell 7 per cent year- remain positive about the growth potential
introducing measures to adapt to the effects on-year to $23 per sq m per month. Grade B of the serviced apartment market in the long
of the pandemic. was down 8 per cent year-on-year and must term,” said Ms. Lew Yen Ping from The Ascott
To drive demand, at the onset of Covid- compete for long-term tenants. Landlords are Limited. “We will continue to deepen our
19 The Ascott had to quickly adapt its opera- offering rent reductions or certain free services presence in the country and provide a safe
tions and step up precautionary measures in to increase their competitive appeal. home away from home.”
line with authorities’ guidelines to safeguard As Savills noted, the serviced apartment
the well-being of guests and staff. They part- Optimistic future segment is closely related to FDI. In 2020,
nered with e-commerce platform Shopee to According to the Savills’ report, future the total registered FDI capital into Ho Chi
launch promotions, helping them tap into supply in Hanoi of 2,186 units will come from Minh City of approximately $4.4 billion,
the popularity of e-commerce and shopper- 16 projects. The market is becoming scattered, despite being down 48 per cent year-on-
tainment to reach a wider demographic and with 80 per cent of supply in Tay Ho and 20 year, was the highest nationwide. By end-
bring The Ascott experience closer to cus- per cent in Nam Tu Liem, Ba Dinh, and Dong 2020, registered FDI in Hanoi of approxi-
tomers. It also launched “Work in Residence” Da districts. Six international operators are mately $712 million was 52 per cent of the
and “Space-as-a-Service”, to optimize the use expected to be managing 89 per cent of new figure in 2019. Accounting for 97 per cent of
of space in its properties to extend service supply in Hanoi. By 2022, meanwhile, more FDI inflows, expats working for Asian busi-
offerings and seize upon new business oppor- than 750 units in Ho Chi Minh City will come nesses remain the largest tenant pool. The
tunities from the “new normal”. from seven projects. Somerset and domestic Covid-19 vaccine currently under trial in
With the #FraserCares commitment, Fraser chain CityHouse will provide management. Vietnam also raises the prospect of business
Suites Hanoi made significant changes to Among the major players, Fraser Suites travel restrictions being lifted. “With Vietnam’s
ensure safety for all. “We continue to work Hanoi is still on track to open a new tower in increasing urbanization, large young popu-
closely with local authorities during this the first half of this year, in anticipation of lation, and rising middle class, it will continue
period to ensure that our guests are able to demand rising when travel restrictions are to be an attractive destination for FDI,” said
return home safely,” said Ms. Sandy Ng. “The lifted. The Ascott also plans to open 12 prop- Ms. Lew Yen Ping. “Expats and business
knowledge that the well-being of our staff erties with more than 3,000 units over the travelers are expected to rise in number as
and guests remains a priority gives us an next few years. This includes four properties the country eases international travel restric-
added advantage in the ‘new normal’ as the with about 1,000 units for 2021. It is slated tions, generating greater demand for quality
world continues to battle the pandemic.” to open Ascott Centennial Saigon in Ho Chi serviced apartments.” %

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