CBRE Vietnam has just released a report on serviced apartments in Ho Chi Minh City, with rents being maintained at a high level thanks to the high demand from foreign tenants. Currently, the average rent is $38 per sqm per month for Grade A serviced apartments and $32 per sqm per month for Grade B units.
Serviced apartment segment targets foreign tenants in Vietnam, including long-term business travellers and short-term tourists. Tenants of high-class serviced apartments often work at foreign-owned companies, embassies, experts in industrial parks, international banks, technology and software firm operating in Vietnam.
Rents of serviced apartments in HCMC remain high because of strong demand. (Photo: Vu Le)
Grade A serviced apartments offered to foreign tenants normally have to provide high-quality utilities and services that are equivalent to standards of hotel rooms. Each Grade A serviced apartment is designed with a large living space, bedroom, working desk, kitchen and accompanying furniture such as air conditioner, water heater, washing machine. Tenants are served by professional services, from cleaning room to 24/7 meals. Foreigners from the same country and territory tend to live in the same building or neighborhood.
Also in its report, CBRE Vietnam has revealed that the serviced apartment market in Saigon experienced a strong differentiation at the end of 2018, with more supply in the suburbs and outlying districts. It is expected that 60 more serviced apartments at a project located on Nguyen Huu Tho Street, Nha Be District will be launched this year. Japanese, Korean and Singaporean are the main tenants in South Saigon.
There are 39 projects with 4,958 serviced apartments being offered for rent in Ho Chi Minh City. In particular, the central area (District 1 and District 3) sees the highest rate, with most of projects in Grade A segment, followed by District 2 and District 7.
According to experts, the abundance of additional supply from new apartment projects has created a fierce competition on the serviced apartment market. Moreover, this is also one of the big challenges for investors in the 2019-2020 period. In the past two year, Ho Chi Minh City market got an average of around 30,000 completed apartments per year. Large supply and high competitiveness force project developers to provide customers with professional management services and make a big difference in facilities to attract and retain tenants.
