Mid-Priced Serviced Apartments in Hanoi Experience Rent Surge

According to Avison Young, the occupancy rate for mid-priced serviced apartments in Hanoi has reached 77%, with rents showing a significant increase. In contrast, the high-end segment maintains steady rents at $35, boasting an 82% occupancy rate.

Driving Forces Behind the Demand

Matthew Powell of Savills Hanoi highlights the development of industrial zones and the influx of foreign direct investment (FDI) as key drivers. This year, FDI has surged by 31% to nearly $1.5 billion, attracting experts from Japan and South Korea who prefer serviced apartments for their accommodation needs.

Tourism and Infrastructure Development

The recovering tourism industry, with Hanoi welcoming 7.3 million tourists in the first quarter, up 8.7% year-on-year, further bolsters the market. Improved infrastructure, including ring roads and expressways, enhances accessibility between the city and industrial zones.

Challenges and Optimism

Potential challenges such as U.S. tariffs could impact foreign capital inflows. However, experts remain optimistic, citing Vietnam's long-term advantages and government reforms aimed at simplifying investment procedures.

Future Supply

With seven apartment projects expected to complete this year, adding over 1,000 units mostly in the inner city, the supply of serviced apartments is set to grow.