The supply of serviced apartments in the center of HCM City is becoming rare, as a series of frozen land projects.
Putting together the project
According to CBRE, in the first nine months of the year, occupancy rates in the CBD of HCMC were always at 90-95%. Average rental rates are from $30 to 40 /sqm / month. The supply of apartments is scarce, so the investors are racing gold land to do the project.
For example, the Novaland Group is rushing to execute the Madison project in Thi Sach Street, District 1. This project is in the “gold core” of the administrative and economic center of Ho Chi Minh City. Surrounded by iconic works of Ho Chi Minh City such as the Opera House, Nguyen Hue Walking Street and other commercial centers, offices, hotels and high-class services.
Although located in the heart of Ho Chi Minh City, Thi Sach is a quiet road and many green trees, so the project perfectly meets the needs of the upstream group. The project has more than 100 apartments and 70 office-tel. Novaland made a commitment to customers will be leased for $ 88 million per month.
The Oakwood Apartments in District 3 are also being completed for lease later this year. The project is invested by Son Kim Real Estate Joint Stock Company, providing 68 apartments from Studio to 2- bedroom apartments with various facilities such as restaurant, gym, lounge… The house was inspired by Saigon architecture in the 1950s and 1970s, reflecting the vibrant history of Do Thanh.
The Ascott Waterfront Saigon luxury serviced apartment is part of a complex of office buildings, with offices of many finance companies, and banks are also completing the final stages of leasing. The project is located at Ton Duc Thang Street, District 1.
The project will provide spacious apartments with elegant design, a flexible area from a small apartment to 4-bedroom Penthouse with fully equipped kitchen interior with separate working and dining areas… Enclosed are a range of amenities such as a sports club, swimming pool, rooftop bar, restaurant, children’s play area and ancillary retail stores.
Similarly, the Citadines Regency Saigon project will be the first Citadines serviced apartment of The Ascott in Ho Chi Minh City. Citadines Regency Saigon is located at Pham Ngoc Thach Street, District 3. This project will have a series of stylish apartments from the studio, one bedroom apartment and two bedroom apartment. Citadines Regency Saigon’s special features are additional shuttle services, childcare …
Race together … keep the car
According to CBRE, the serviced apartment market this year only has a new supply from Sila Urban Living project on Ngo Thoi Nhiem street, district 3 with 217 apartments. Although located in the Grade B segment, the area of each apartment is not large but Sila Urban Living has the modern design with the location near the center so the project is popular with Japanese. Currently, the occupancy rate of the project has reached 60%. The asking rent of this project is in the range of $37 – 41 / sqm/month.
“The serviced apartment market in recent years has not had a lot of new supply, especially in the A-segment. As a result, rents and occupancy rates remained relatively good. The supply of serviced apartments in 2017 and 2018 will be slightly better as some projects will be put into operation. However, the serviced apartment market in District 1 still retains its position and is not directly competitive thanks to its prime location, “CBRE said.
Another reason that makes serviced apartments in the central area scarce is due to many projects being closed. For example, the land of 1bis is located at the Nguyen Dinh Chieu – Nguyen Binh Khiem crossroads, District 1 is a wilderness area, the trees grow luxuriant.
The land was approved for the construction of 34-storey residential, hotel and serviced apartments. The project consists of 3 blocks: hotels and serviced apartments, business apartments and apartments for resettlement on site. At the completion of the project will be 934 apartments, of which 847 serviced apartments. However, now the land is still dormant.
Another area located in front of Le Duan – Hai Ba Trung street, is also a large parking lot. This land is the Lavenue Crown project invested by Kinh Do Corporation, Ho Chi Minh City Housing Management Company Limited and Mayflower Investment. Although the exterior is crisscrossed, with pictures showing the project’s magnificent interior but just a car park.
Since 2007, Ho Chi Minh City People’s Committee has approved Sai Gon Kim Cuong Joint Stock Company to invest in SIC Tower project at the land located on Le Thanh Ton – Nam Ky Khoi Nghia – Le Loi – Nguyen Trung street. Direct. SIC Tower will be built 52 floors high and total investment of over $137 million, including serviced apartments. However, the land is currently used as a parking lot.
According to Mr. Rudolf Hever, CEO of Alternately, the real estate market in HCM City has had positive signs for the past few years. However, there are still the shortage of serviced apartment projects to meet the needs of short-term or long-term business travelers. This segment is continuing to grow as the economy gradually improves.
HCMC Real Estate Association said that serviced apartments are an attractive business model, less affected by the typical fluctuations of the traditional hotel model. In previous years, serviced apartments were mainly aimed at long-term business travelers. In recent years, serviced apartment operators have extended the segment to residential short-stay clients, with a similar pattern to hotels.
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