Besides Hanoi , localities such as Bac Ninh and Hai Phong have the potential to develop serviced apartments. Projects in these provinces need to be invested in and developed systematically and conveniently to attract and retain tenants.
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| The increase in foreign direct investment (FDI) has had a positive impact on the serviced apartment market (Photo: PV). |
According to Ms. Do Thi Thu Hang, Senior Director, Consulting and Research Department, Savills Hanoi, FDI capital affects the serviced apartment market in two ways. The first is the direct impact, foreign investors pour capital into serviced apartment projects. For example, the Hanoi market currently records many large projects invested by Korean and Japanese investors such as Lotte Center Lieu Giai, Lotte Mall West Lake, Keangnam Landmark 72, Roygent Parks or The Authentic Haseko Long Bien... Investors develop class A serviced apartments to serve foreign experts from Japan, Korea, Singapore... who come to Vietnam to work for a long time. These apartments are fully equipped with amenities, ready for immediate use. The project also has support services for individuals and families living long-term.
The second is the indirect impact. FDI affects the serviced apartment market in the direction of increasing demand for this segment. Specifically, the industrial real estate market is currently strongly attracting FDI. Vietnam has received attention from many foreign investors and large enterprises such as Samsung, LG, Foxconn... As of September 2024, Vietnam has attracted 24.8 billion USD in committed FDI capital, with 2,492 newly registered projects - total investment capital of 13.6 billion USD. The North accounts for the largest proportion with about 59% of newly registered FDI capital in production, equivalent to 5.3 billion USD with 472 new projects.
As FDI increases, the demand for land and ready-built factory rentals also increases, especially in developed or emerging localities such as Bac Ninh, Hai Phong, Bac Giang , etc. Bac Ninh is the most prominent region, leading the country in attracting FDI, accounting for 18%, equivalent to 4.5 billion USD. At the same time, Bac Ninh also owns the largest supply of ready-built factories and warehouses in the North, accounting for 40% of the total supply. Hai Phong follows with 33% market share. In addition, there are localities neighboring Hanoi such as Vinh Phuc, Thai Nguyen and Ha Nam.
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| Hanoi has great potential for serviced apartments (Photo: PV). |
Analyzing the relationship between the development of industrial real estate and the serviced apartment segment, Ms. Hang shared: “When businesses invest in leasing land, factories or pre-built warehouses, they often send experts to work. In the early stages, these experts tend to consider and choose serviced apartments. They prioritize choosing serviced apartments in Hanoi because of the full range of amenities, from accommodation, entertainment activities to schools for their children.” Not to mention, the increasingly developed transportation system also supports experts to travel daily, from apartments in Hanoi to neighboring industrial parks for work.
Responding to market demand, Ms. Hang said: “In the future, the serviced apartment market in Hanoi will still hold a prominent position. In the next 3 years, there will be more than 2,000 serviced apartments introduced to the market. In particular, popular areas such as Tay Ho and Ba Dinh will continue to have a lot of supply. In particular, the West Lake area is expected to contribute a significant amount of supply to the total of more than 2,000 apartments just mentioned.”
In addition, some localities such as Bac Ninh , Bac Giang, Thai Nguyen, Hai Phong, Quang Ninh... places that have successfully attracted FDI capital are having some investors considering developing serviced apartments with quality products, international operators, diverse utilities, and full services necessary to compete with the Hanoi market for the group of experts working locally. These markets currently have and are having large supporting utilities such as international schools, high-quality hospitals, golf courses..../.
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