Viet Nam property competitive in the Asia-Pacific market

Thursday, Sep 11, 2014 18:00

Property developments in the west of Ha Noi. The Vietnamese real estate market has been more competitive in Asia Pacific. — Photo

HA NOI (Biz Hub) ─ Viet Nam has been more competitive in the pricing of its real estate market than its peers in the Asia-Pacific market.

This has been happening within the context of growth in the region's real estate market in the first half of 2014, said Troy Griffiths, Savills Viet Nam deputy managing director.

In a statement issued on Wednesday, Griffiths also said the country's competitiveness was particularly seen in the hotel, retail and service apartment asset classes.

According to Griffiths, office rental markets recorded growth of 1.6 to five per cent across most regional cities in the first half. However, China is showing a mixed picture, with office rentals declining in Shanghai because of supply concerns but rising in Shenzen.

Hong Kong ranks first with a monthly rent of US$189.4 per square metre while Ha Noi is offering $41.7 per square metre and HCM City, $48 per square metre.

A majority of retail markets are recording slower growth in a late up-cycle, and this suggests that sectors are approaching their peak in most cities. In Manila, rising middle-class incomes are the main driver of consumer spending, which in turn is boosting demand for retail space.

Luxury apartment rents are showing mild growth in some Asian cities, and rental markets in Hong Kong, Singapore and Shenzhen are experiencing a downtrend and seeing an apparent correction. Strong rental growth in the luxury serviced apartment sector was also noted in Manila.

In the hotel sector, Guangzhou and Osaka have both recorded high growth rates, followed by Singapore, Tokyo and Taipei.

"With quality investment stock difficult to source and given Viet Nam's recent strong macro performance and established fundamentals, these asset classes are attracting the attention of foreign investors and developers," said Griffiths. "Provided pricing is realistic, this interest is likely to continue."

According to Savills Viet Nam, with a generally stable economic outlook, Asian currencies have appreciated slightly by one to four per cent in the first half.

However, currency devaluation has been experienced in China and Viet Nam, recording a 0.9-per cent and one-per cent local depreciation against the US dollar, respectively, compared with that of the end of last year.

The Japanese government increased its consumption tax rate from five per cent to eight per cent this April, which is reflected in office and retail rents in Tokyo and Osaka. ─ VNS

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