|
Ha Noi real estate market grows in Q1
Savills Viet Nam, a company specialising in real estate services, will release its report today on Ha Noi's real estate market for the first quarter of this year. The report will include information about apartments for sale, serviced apartments, hotels and retail space. Viet Nam News reporter Hoang Ha talked with Matthew Powell, Ha Noi Branch Director of Savills Viet Nam, about growth of the market.
How did the domestic property market develop in the first quarter of this year? Where were the hot places in the market?
During the first quarter of 2010, we have witnessed a steady growth in the domestic property market. Viet Nam's economy is showing signals of recovery and is expected to recover in the 2010–11 period, which will partly contribute to the development of the real estate market. After the Prime Minister's recent decision to close all gold trading floors, some investors may switch to the property market.
Apartments for sale market: The Q1 2010 primary market contributed 1,816 units from 15 active projects although there were fewer transactions than in the previous quarter. About 1,200 units were sold during Q1 2010. Housing demand is currently high. The city is expanding to the west, which may draw the demand for apartments to that area. The primary market in Q2 2010 could see 1,990 new units from seven projects and 2,000 more could be opened by the end of the year. The primary market is expected to open about 10,900 units by 2011. An unidentified number of apartments from the new urban areas is also expected to contribute to the future supply.
Savills has recorded good sales activities since Q3 2009. Good quality projects located in suitable areas are still attracting potential buyers.
Savills predicts the hot areas will be in the West and East of Ha Noi.
Office for lease market: Savills recorded about 610,000sq.m of total office space in Ha Noi, a slight increase of 3.5 per cent compared with Q4 2009. Average occupancy across all grades and districts slightly increased to about 85 per cent, which was an increase of about 2 per cent quarter on quarter. Occupancy rates of Grades B and C increased noticeably when compared with Q4 2009. Otherwise, the average rent for all grades and districts in Q1 2010 saw a decline of 3.6 per cent against Q4 2009, achieving around US$27 per square metre per month.
Even with the recovery of Viet Nam's economy from the end of 2009 and the return of some foreign invested enterprises to Viet Nam, only limited demand for office space was seen during the last quarter. Based on the initial positive impact of the regulation that bans the use of apartments for office space or trading areas, it appears the Grade C market will continue improving throughout the remainder of the year. In the next four years, nearly 1.9 million square metres of additional office space from about 120 projects are planned to come online, which will result in an oversupply.
Some current and future adjustments will be good for this market. Developers and landlords need to be more ‘practical' because the market is becoming competitive and tenants are getting picky. Only the right product at a reasonable price will win.
Retail market: In Q1 2010, the average occupancy rate of the entire retail market was 92 per cent, the same as Q4 2009, but down slightly compared to Q1 2009 at 95 per cent. With several upcoming events in 2010, especially the Thang Long Ha Noi 1,000th anniversary, there will be an increased demand for rooms in the hospitality industry as well as an expected boost in the retail market. There is an estimated 67,000 square metres entering the market in 2010.
From our perspective, the retail market has a lot of potential; however, the market is still in its infant stage. Investors will need ‘knowledge' about location and design before working out any plans.
Many experts have said the domestic property market will have a lot of difficulty recovering in the coming time due to a lack of capital for property projects. What is your opinion on this issue?
Capital is always one of the problems for developers. However, developers are now able to utilise multiple channels to raise funds. The headache right now is deciding what product to offer. Investors may know how to deal with capital shortage but most of them are not always sure of the most appropriate product. The time when anything on the market will sell is over. More competitiveness combined with more sophisticated buyers and tenants have urged developers to tie up with real estate advisors for advice.
What is your expectation about the property market this year? Where will the hot markets be? Why?
I think the property market will continue its steady growth this year. Some people may look forward to a booming or a dramatic rocket, or even a ‘fever', but in my opinion that's not good for healthy market development. The nature of the real estate market is long-term development. For a young market like Viet Nam, several fluctuations are necessary to adjust the market and allow it to mature.
Hot places for apartment sales could be in the east of Ha Noi, such as Gia Lam, Long Bien and Dong Anh. I am not sure about hot places, but I think good locations, premium quality and excellent design concepts will always work.
What could the State do to boost healthy development of the domestic property market?
The State has already put a lot of effort into boosting healthy development of Viet Nam's real estate market. We have recently seen a lot of new infrastructure development. The government also continues to improve the investment environment and has enabled a quick project approval process. Information, long-term vision, large scale development and clear regulations could also contribute to the market's development.
How did Savills' business develop last year?
We are the biggest real estate consultancy in Viet Nam. Throughout the year we have been in line with the market and made considerable contributions to the development of the sector in Viet Nam. With more than 500 staff in 2 offices, Ha Noi and HCM, including many foreign experts, we have delivered a full range of international real estate services in a variety of consultancy services, and agency and property management. Our client portfolio includes Indochina Land, HSBC, ANZ, Setia, and many other local partners. Looking at data from 15 years ago and our experience with Viet Nam, we have always supported clients with the most updated information, professional market knowledge, timely consultancy and customer service.
How is the company's business plan in Viet Nam this year and beyond?
We will continue to expand our services. We will still decide where to go and how to back up the development of Viet Nam's real estate market. Our knowledge and experience give us the foundation to contribute to the sector's development.
vietnamnews
|
