Many serviced apartments closed, rental prices dropped the most in 4 years

(NLDO) - Savills Vietnam's 6-month report on the Ho Chi Minh City real estate market shows that the serviced apartment rental market continues to be gloomy since the Covid 19 pandemic.

Accordingly, up to 1/3 of serviced apartments have had to provide free electricity and water or reduce rent by 20% for customers, down to the lowest level since 2016.

Savills report also shows that in the first 6 months of 2020, 2 Class C projects closed, reducing 121 apartments out of the total supply of 109 projects (about 6,400 apartments). There were 2 projects converted to office for lease. In the second quarter, serviced apartment rental prices continued to decrease by 4% quarterly and annually, to 23 USD/m2/month.

A serviced apartment complex in District 3, Ho Chi Minh City. Photo: Tan Thanh

According to Savills, in the past two quarters, serviced apartments only achieved an average occupancy rate of 61%, continuing to decrease by 5 percentage points quarter-on-quarter and 19 percentage points year-on-year. The occupancy rate of the B-class segment was most affected due to its dependence on short-term guests.

In the last 6 months of 2020, Savills forecasts that the serviced apartment market in Ho Chi Minh City will still be under pressure due to the pandemic. However, in the second half of 2020, the demand for serviced apartments is expected to improve as 7,000 foreign workers may enter Vietnam.

The results of a global survey conducted by Savills in June showed that with 2 billion USD of foreign direct investment (FDI) in the first half of 2020, Ho Chi Minh City ranked second in the country in attracting FDI, down 35% compared to the same period last year, but Ho Chi Minh City in particular and Vietnam in general are still attractive investment destinations for many foreign enterprises.

Source: https://nld.com.vn/kinh-te/nhieu-can-ho-dich-vu-dong-cua-gia-thue-giam-manh-nhat-4-nam-20200718135411565.htm