An urban area in Ha Noi's Cau Giay District. Cau Giay remains the main supplier of office space in the capital city. — Photo sunland.com.vn

HA NOI ― The property market in the capital city has shown some positive signs in the second quarter of this year, the head of Research and Consultancy at Savills Ha Noi, Do Thu Hang, said at a meeting on Wednesday.

In the office sector, spaces in the west of the city were being rented reasonably well despite significant supply, she said. Cau Giay District remained the main supplier of office space, with 282,000 sq.m, accounting for 23 per cent market share.

Total stock in the city was about 1.2 million sq.m from 146 buildings, up 10 per cent over the first quarter and 22 per cent over last year.

Office take-up greatly increased in the quarter to nearly 41,000 sq.m, with the leased area of Grade A buildings in the west area continuing on a sharp upward take-up trend to reach 9,600 sq.m.

In the retail sector, rented space declined but electronic stores and supermarkets from well-known retailers were expanding, according to Hang. Seventeen projects were expected to be added in the remainder of the year, providing about 480,000 sq.m, or 63 per cent of the current stock.

With regards to hotels, the average number of occupied rooms in the second quarter was 4,200, a year-on year increase of 9 per cent.

She said seven projects supplying 1,300 hotel rooms were expected to enter the market this year and Tu Liem District would provide the largest supply, with 70 per cent of future projects here set to be five-star hotels.

In the second quarter, the serviced apartment sector rose again, meaning the total number of leased units has now increased for five consecutive quarters, reaching 2,600 and up 1.6 per cent year on year.

Apartments from high-end projects in Tay Ho, Hoan Kiem and Tu Liem districts offered much softer rents, ranging between VND100,000 and VND310,000 per sq.m (US$4.7-14.8) per month.

For apartment sales, the number of projects selling raw-construction units had increased because developers wanted to reduce the total price per unit to attract end users, Hang said.

She said that only a very limited number of developers and buyers had been able to take advantage of the Goventment's stimulus package of VND30 trillion ($1.43 billion), however, since the application process was extremely difficult.

She said the soft liquidity of the villa market remained in the second quarter, with the average price of this market having dropped 2 per cent, the lowest decrease in approximately one year.

She noted that significant challenges were facing villas in the coming months as there was still a lack of proper infrastructure developments accompanying this kind of property.

Savills Ha Noi deputy director Tran Nhu Trung said that despite improved economic growth, foreign direct investment and interest rate conditions, weak demand in the economy remained an obstacle for the property market.

Savills Viet Nam deputy managing director Troy Griffiths noted positively that Asia as a whole was showing potential economic growth of about 5 per cent this year, although he conceded that Viet Nam still had inferior business environment governance compared to its neighbours.

"If this governance is not improved, investments will go somewhere else like Indonesia or the Phillipines," he warned. ― VNS