"After the rain, good weather. In the wink of an eye, the universe throws off its muddy clothes."

Download Savills Q3/2023 Market Brief for the latest insights on Viet Nam’s residential, commercial, and hospitality real estate in Ha Noi and Ho Chi Minh City.

Commercial Real Estate

According to Savills Q3/2023 Market Brief, commercial real estate continues to perform well, with Viet Nam’s office market delivering higher occupancy and lower occupancy costs than most regional peers and retail continuing to perform well with many significant international and domestic brands looking to enter or expand in Viet Nam.

Office Real Estate in Viet Nam

The office real estate market in Ho Chi Minh performed well in Q3/2023 with rent reaching VND 771,000/m2/month and occupancy staying high at 90%.

Although the office market in Ha Noi is seeing more stable gross rent at VND 513,000/m²/month and occupancy of 85%, it is a prime time for prospective tenants. According to Hoang Nguyet Minh, Senior Director, Commercial Leasing, Savills Ha Noi, this is an ideal time for prospective tenants to lease offices or expand their existing offices.

Retail Real Estate in Viet Nam

In Ho Chi Minh City’s commercial property market, retail performance has been solid. Occupancy stayed high at 91%. Average retail rent in Ho Chi Minh City varies by area, with non-CBD rent averaging VND 1 million/m2/month, while CBD rent is significantly higher at VND 3.3 million/m2/month.

In Ha Noi, retail occupancy was slightly lower than in HCMC, however, it was still high at 86% in Q3/2023. However, like in HCMC, rent differs by area. Non-CBD rent reached VND 1.3 million /m2/month. CBD locations had a 64% premium over their non-CBD counterparts and ground floor rent reached VND 3 million/m2/month.

According to Savills experts like Do Thu Hang, Senior Director, Advisory Services, Savills Ha Noi, across the globe, experiential retail is driving demand, changing shopping centres from purely transaction spaces to places for socialisation, interaction, and experiences. A new retail project in Ha Noi Lotte Mall West Lake Ha Noi launched in September 2023 and delivers immersive experiences with 233 stores, indoor playgrounds, an aquarium, and diverse international and domestic brands. The blend of leisure, entertainment, and brand-building experiences makes for a dynamic and engaging hub.

Residential Real Estate

Residential and housing markets in Ha Noi and Ho Chi Minh City remain muted with poor buyer sentiment, extremely limited new supply, expensive inventories, and developer caution.

In Ho Chi Minh City’s housing market, primary apartment stock reached 7,772 units. For landed properties in Ho Chi Minh City, primary stock hit a ten-year low at 766 dwellings. Apartment sales in Ho Chi Minh City increased by 561% QoQ and 102% YoY to 2,003. Landed property sales were muted in Q3/2023 at 64 given weak demand, limited supply, and expensive inventory.

Residential real estate performance in Ha Noi was also muted. Despite decreasing by -3% quarter-on-quarter (QoQ) and -6% year-on-year (YoY), apartment primary stock was higher than in Ho Chi Minh City at 19,808 units. Villa, townhouse, and shophouse primary stock was only 724 dwellings. Macroeconomic factors, financing difficulties, and affordability concerns affected the residential market in Ha Noi and there were only 2,100 apartment sales and 101 landed property sales.

According to Giang Huynh, Head of Research and S22M, Savills HCMC, in both Ho Chi Minh City and Ha Noi, infrastructure development will underpin future residential development. Infrastructure like ring roads connects central hubs to satellite areas where land is more freely available at more accessible prices. This encourages developers to build property but also spurs demand as residential and real estate products in areas around Ho Chi Minh City and Ha Noi are often more affordable.

Hospitality Real Estate

Hotel Real Estate in Viet Nam

Both Ha Noi and Ho Chi Minh City experienced low seasons in Q3/2023. In Ho Chi Minh City, stock reached 15,641 rooms from 109 hotels. Hotel occupancy in Ho Chi Minh City averaged 58% with rates of VND 1.9 million/room/night. For hotels in Ha Noi, stock reached 10,962 rooms and occupancy reached 61% with rates of VND 2.7 million/room/night. While tourism in Viet Nam is yet to rebound to 2019 levels and trails regional peers like Thailand and Singapore, the new e-visa rules in Viet Nam are likely to support an increase in inbound international travel.

Serviced Apartments in Viet Nam

After facing difficulties during the pandemic, serviced apartment performance has picked up given improved FDI inflows and the return of expats with long-term demand and local tenants with short-term demand.

In Ho Chi Minh City, serviced apartment stock reached 7,463 units with occupancy of 81% and rent of VND 518,000/m2/month. Stock of serviced apartments in Ha Noi reached 6,158 units with occupancy equal to Ho Chi Minh City at 81%, but rent was higher at VND 578,000/m²/month.