Savills' real estate market report shows that in the first quarter of 2025, the serviced apartment segment will continue to improve in terms of operations. Total supply is stable quarterly with 6,246 units in 64 projects, up 3% year-on-year.
The occupancy rate of serviced apartments in the first quarter of 2025 was recorded at 86%, up 2 percentage points quarter-on-quarter and 4 percentage points year-on-year. Class A and B apartments had higher occupancy rates than the previous quarter, while Class C continued to decrease by 2 percentage points compared to the fourth quarter of 2024.
The average rental price of serviced apartments per square meter in the Hanoi market in the first quarter of 2025 reached 610,000 VND/m2 (rental price includes service fee, excluding VAT). Class A and C rental prices recorded quarterly increases, Class B is the only segment with stable rental prices quarterly.
The factor leading the operation of the serviced apartment segment continues to be the foreign direct investment (FDI) into the market.
Mr. Matthew Powell, Director, Savills Hanoi, assessed: "The Hanoi market continues to record strong demand, driven by the development of industrial parks and abundant FDI inflows, along with relatively limited supply in neighboring provinces".
According to the Hanoi Statistics Office, in the first quarter of 2025, Hanoi will continue to affirm its position as an attractive destination for investors when attracting 1.415 billion USD of FDI capital, an increase of 49.5% over the same period in 2024 and ranking third nationwide in attracting foreign investment capital. Of which, 81 new projects were registered with capital reaching 29 million USD; 34 additional projects increased capital with 1.165 million USD; 83 foreign investors contributed capital and bought shares reached 221 million USD.
Regarding the portrait of tenants, foreign experts from Japan and Korea working at FDI-backed enterprises and related units such as embassies, industrial parks, international banks, and foreign enterprises are still the main tenants of the serviced apartment market in Hanoi. With the appearance of a number of high-quality projects such as Lancaster Luminaire, Swiss- Belresidences Hanoi, this group of tenants has increased in Cau Giay and Dong Da districts. Meanwhile, tenants from other countries prioritize places with many spacious apartments such as Nam Tu Liem, Tay Ho and Ba Dinh.
The supply of serviced apartments in neighboring industrial provinces such as Hai Phong, Ha Nam, Thai Binh and Nam Dinh is also recorded with an occupancy rate ranging from 70 - 90% in the first quarter of 2025.
The supply in this locality mainly serves low-income tenants and the need to use utilities at a moderate level. However, according to Savills, due to limited current supply and a shortage of future supply, Hanoi will still be the main destination for tenants who need high-quality accommodation in the coming time.
In terms of prospects, from 2025, 18 projects are expected to launch 4,133 new units to the market. In 2025, 7 projects will provide 1,040 units. Tay Ho View Complex is expected to add the largest class A supply, 78% of future supply is in the inner city area and the remaining 22,2% is in the western area.
Savills also said that 83% of the future supply of serviced apartments in Hanoi will belong to international operators with a number of notable brands such as The Ascott, Lotte Group, Pan Pacific, Shilla hotels & Resorts, Marriott, Hilton and Hyatt.
