Premium Serviced Apartment prices move up

 

Supply is limited, the new upgrade projects move higher rates are caused price pressures grade A serviced apartments in HCM City increased gradually, the increase may be up to 10-20%, according to CBRE Vietnam.

This advisory unit, said the average rent for Grade A serviced apartment reached $ 32 a month m2, up 2.7% from the same period last year and will continue to increase until the end of 2015 because of scarcity supply.

Specifically, in the future, after many projects: Somerset Ho Chi Minh, Sherwood Residence, Diamond Plaza and Riverside completed the upgrade, this segment appears promising new price level. "Currently the demand for high-end serviced apartments continue to rise due to the expansion of multinational companies", CBRE forecasts.

Not the least daring as CBRE, deputy director of Consulting company Savills Vietnam, Nguyen Thi Van Khanh quite cautious for that rents of grade A serviced apartments will only tend to increase slightly during future.

The cause, according to Ms Khanh, new supply in the future is quite small for the operations of this segment is expected to remain stable at a high level over 90% in the coming quarters. Occupancy of service apartments in HCMC Grade A sign appeared slight increase in many quarters in a row.

Tenants Ms Khanh this segment, also subject to special, mostly foreign experts, senior managers, CEOs, entrepreneurs, with a high income. These objects selected only rent the apartments are managed professionally in the CBD, namely District 1, 3. The rest of the market is the serviced apartment B, C attracted expert group Foreign midrange.

However, pressure on prices due to supply shortage of Grade A serviced apartment still face obstacles, such as the number of apartments are for rental investment is increasing rapidly in HCMC.

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According to the survey, the middle of February 9/2015, rents for Grade A serviced apartment in HCMC around 30 USD per m2 per month or more, depending on the location and extent of service completion. If the total cost of rental of Grade A serviced apartment is about 3000-6000 dollars for 2-3 bedroom apartments a month. Despite the limited supply (rare in the central area) but this product line is quite picky guests, often criticized as market rents are too high. Indeed both serviced apartment market is under intense competition from luxury apartments whether sublet in Binh Thanh area, District 2, 7 have rent an apartment from 1500 USD per month or less.

Director of Dat Lanh Real Estate Company, said Nguyen Van Duc supply "crisis" from the apartment project to appear in the East HCMC, handed down between 2016 and 2018 will be a strong impact on real estate market lease. According to his calculations Duc, 2015 the amount of new apartment suddenly stronger offering 40,000 units, local focus in the triangle area of District 2 and Binh Thanh and Thu Thiem. "Many investors buy apartments for sublease and this could drag down rents, even affecting the segment of real estate leasing," he said.

Management of Research and Consultancy Cushman & Wakefield, Tran Ngoc Chi, said that the service apartment always had difficulty competing with the luxury apartments for rent, and this situation has occurred in a long time. To cope with this situation, many apartment projects more flexible services for the form of short-term rental, lease or even by day as the hotel to limit availability.

Ms. Chi explained, for apartments to rent the same classification (Class A or B), the same type of area, number of bedrooms, the apartment in the condominium projects cheaper apartments Translation Services from 40 to 60% of District 1, and even cheaper half for District 2 and District 7.

With the amount of difference, including hiring hourly daily cleanup still cheaper than the cost to pay for the service apartments. Therefore, more and more visitors prefer renting apartments over. In addition, the apartments are guaranteed adequate utilities such projects serviced apartment: parking, pool, gym, restaurant, supermarket, children's play area ...

Ms. Chi said that disregarding the price competition, the apartment project new advanced services in the CBD (Central Business District) will promote the project advantages over apartments. First, since the position. While the apartments are located at the edge of downtown or near the center, the service apartment projects soon to come into operation are located in extremely favorable location in the city center, as on Nguyen Hue Street, or Ton Duc Thang - even financial and commercial district of the city.

In addition, the management and operation of international reputation will help these projects and activities regulated professional. The luxurious interior elements and diversified services, professionalism will contribute to increasing the value of these projects. "Therefore, the project executive serviced apartments in central areas will compete well with the project aparthotel intended audience for tenants will be in higher positions in large corporations or clients have the budget for luxury housing, "Ms Chi says.

A senior expert observing real estate market for more than 10 years renting recommended, market rental apartments are facing strong differentiation. Maybe grade A serviced apartments successful price increases due to the superior features compared with luxury apartment rentals in the future.

However, the rest of the market is the project not very favorable position (in particular, serviced apartments class B and C) will face many difficulties. "Group Apartments inferior service on location and class will face many obstacles in the race to compete in the increasingly fierce rent apartment from the rental of up to tens of thousands of products in time next time, "the expert stressed.

Apartment rentals are managed apartments hotel standards, mainly for foreigners hired full all closed professional services: sanitation, laundry, food, personal service if people have needs ... Meanwhile, apartments for rent are in the condo project went into operation, the owner is not in that business for lease. Often apartments for rent are not available, or not many useful services such as serviced apartments.

Source: Vnexpress