HCM CITY (VNS) — Four new apartment properties (An Phu Plaza, K&T, Somerset Vista and Capri) entered the HCM City market during the first quarter, together with a number of units from residential project Xi Riverview Palace.
The 374 new apartments represent an 11 per cent increase over the previous quarter, according to property service company Savills Vietnam.
Capri has opened more than 100 apartments, with 175 units expected to be on offer in June, according to general manager Charlie Feng.
"We have enjoyed a positive response from customers to date," said Feng, adding that many had signed long-term contracts for up to one year.
According to Savills Vietnam's first-quarter report, however, the occupancy rate fell by seven per cent to 78 per cent. Not counting new properties, this rate would be 85 per cent.
Average prices remained at VND500,000 (US$24) per sq.m per month. Currently, about 3,800 serviced apartments from 68 properties are available. An additional two properties with a combined 100 units will likely enter the market this year.
Performance
The occupancy rate increased by 2 ppts QoQ and 9.5 ppts YoY to hit 86 per cent, while the average rent decreased by 2 per cent QoQ and 3.2 per cent YoY to VND583,000 per sq m per month. Many Grade A projects have decreased their rent to meet the market demand. The average rent of Grade A projects decreased by 3.3 per cent QoQ and 5.6 per cent YoY to VND669,000 per sq m per month. However, Grade A projects have seen increasing occupancy rates since Q1/2012, reaching 85 per cent this quarter, a sharp increase of 5 ppts QoQ and 17.6 ppts YoY.
Unchanged
The average rent of Grade B apartments has remained unchanged since Q3/2012 at VND430,000 per sq m per month, up by 1.5 per cent YoY. Q1/2013 was the first time in the last five quarters that the occupancy rate of Grade B fell below 90 per cent, hitting 87.9 per cent.
The average rent of Grade C apartments in Q1/2013 was VND318,000 per sq m per month, down by 3.8 per cent QoQ and 4.4 per cent YoY. Even with lower rent, the occupancy rate of Grade C decreased slightly by 0.9 ppt QoQ and 4.8 ppts YoY.
The small decrease in rent had a positive effect on demand in Ha Noi, as the number of leased units increased slightly by 2 per cent QoQ and 13 per cent YoY to reach approximately 2,500 units. Demand in Tu Liem and Cau Giay districts, located in western Ha Noi, continued to increase as the number of leased units rose sharply by 18 per cent.
Outlook
About 19 projects are expected from 2013 onwards, of which seven will provide approximately 1,600 units. In 2013, 290 units from three projects are expected to become available. All of these projects are currently in their fit-out stage. — VNS