Serviced apartments increase as IPs grow

Saturday, Dec 10, 2022 07:32

The north of Viet Nam's IP has attracted lots of foreign direct investment (FDI) enterprises. Frasers Property Group launches the first internationally branded serviced apartment in Vinh Phuc to serve foreign experts serving those enterprises. — Photo courtesy of Frasers Property Group

Frasers Property Group launched the first internationally branded serviced apartment in the satellite city of Vinh Phuc, which is home to 400 foreign direct investment (FDI) enterprises.

Earlier this month, Viet Nam was ranked in the top Baseline and Cost quartile in the latest Manufacturing Risk Index 2022 by Cushman & Wakefield, whose report noted the country was among markets benefiting from the China+ approach of foreign investors.

The report said Viet Nam has seen rapid expansion of its industrial sector over recent years, adding that the market benefited from geographical connectivity both within the region and to markets outside of the region.

Signing an operation and management agreement for the Modena by Fraser Vinh Yen on December 3, Mark Chan, Chief Operating Officer at Frasers Hospitality, told Viet Nam News: “Viet Nam's industrial park is still in the scope of growing," creating more demand for convenient stays for foreigners.

Chan added that “as the first such hospitality concept here, Modena by Fraser Vinh Yen will meet the needs of the extended stay market that we are expecting from Vinh Phuc and its neighbouring towns.”

Scheduled to open in Q4 2023, the 97-unit mid-scale serviced apartment property is designed to cater to business travellers on extended stay with four room types available from studios without kitchenettes of 32-33 sqm to two-bedroom apartments of 81-84 sqm each.

Currently, Vinh Phuc is home to more than 400 foreign direct investment (FDI) enterprises and has some 100,000 workers, including expatriates. Despite the pandemic, this manufacturing hub recorded decade-high economic growth in the first six months of 2022.

Chan said investor sentiment in Viet Nam had not dampened. In particular, the outlook for Vinh Phuc looks promising. The flow of FDI capital into the province saw an increase in 2021, with about US$178 million poured into 29 projects. Separately, ten domestic investment projects were licensed, with over VND7.5 trillion worth of total registered capital.

Modena by Fraser Vinh Yen is the ninth property under this brand since it was launched in China in 2009. There are now six properties in China, including Modena by Fraser Nanjing that opened in 2021 and Modena by Fraser Hong Kong that opened this year, proving that this affordable, aspirational serviced residence brand remains in demand.

In the capital city of Ha Noi, the group also celebrated the first anniversary of Frasers Residence Hanoi in Bac Tu Liem, launched during the height of the pandemic, and Fraser Suites Hanoi completing the opening of its new contemporary Tower B wing that caters to short stay business and leisure travellers in Syrena Tower on Xuan Dieu Street.

Chan said that Viet Nam, and the larger Southeast Asian region, would be key drivers in Frasers Hospitality’s growth plans in Asia Pacific, adding: “It is time to accelerate in Viet Nam. We plan to grow to three times what we are now in the next five years,” with ten to 15 properties in the country.

In Viet Nam, the industrial real estate sector has also been attracting new supply sources. On November 12, investment of VND2 trillion was approved for developing infrastructure at Hai Long IP in the northern province of Thai Binh.

Talking to local media, Nguyen Manh Linh, deputy director of Dai Phong JSC, the developer of Dai Phong and Phu My IPs, said: “The number of delegations of Taiwanese and Chinese investors visiting our IP is increasing thanks to the Chinese government’s decision to ease some of its strict anti-pandemic rules.”

Statistics from the Housing and Real Estate Market Management Agency of the Ministry of Construction showed that in the third quarter of 2022, many industrial real estate projects were started, inaugurated, or expanded, such as Soc Son Clean IP, Dong Anh IP, and Phu Nghia IP.

According to the Ministry of Planning and Investment (MPI), in the first ten months of this year, foreign inflows to real estate continued to surge, with the industry ranking second in the list of industries attracting foreign-invested capital, reaching more than $3.87 billion, against $2.12 billion in the same period last year. Notably, $1.43 billion was newly registered capital and $1 billion was added capital.

Director of Hai Phong Economic Zones Management Authority Le Trung Kien, said: “The existing supply source of IPs in the city does not meet demand. Thus, the city wants to develop an additional 15 IPs by 2025. Currently, the city is concentrating on implementing procedures to establish six new IPs across 2,750ha.”

Chan told Viet Nam News: ”The IP growing in Hai Phong creates lots of potential for long stays and short stays for foreigners,” adding that the experts who come with the move need to good stay near the IP where they work instead of travelling a distance.

The north of Viet Nam, with a total supply of industrial land of 13,600 ha, connects with the southern economic corridor of China, including some prominent regions such as Shanghai, Hong Kong, Shenzhen, Fujian, and Guangdong. This is the economic region chosen as the headquarters of giants in the manufacturing, biochemistry, commerce, and electronic technology industries.

According to Cushman & Wakefield, this region accounted for more than 30 per cent of China’s total GDP in 2021, playing a key role in attracting investment and economic development.

Trang Bui, General Director of Cushman & Wakefield said: “With favourable geographical features, coupled with strong investment in infrastructure and a series of policies to promote investment from the government, the north of Viet Nam has what it takes for ‘queen bees’ to nest and further contribute to Viet Nam’s GDP. — VNS

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