Despite a real estate quagmire in Vietnam, the serviced apartment market appears stable and could emerge strongly from the economic downturn, CB Richard Ellis analysts said.
CBRE Vietnam managing director Marc Townsend presented the company’s December report at the “Vietnam Serviced Apartment Investment Conference 2011,” saying that pressures on the market include “falling rents and fewer tenants due to the worsening economic situation, as well as stiff competition from individuals buying apartments for sublease.”
Still, Vietnam will see an increase in younger, short-term foreign professionals in the coming years, target consumers for serviced apartment. There are only 3,595 existing serviced apartment units in Ho Chi Minh City, while the number of work permits for foreigners in the city last year jumped to 6,700, excluding ‘grey’ expats, or those working without permits, Townsend said during the conference, according to Tuoi Tre News.
Townsend reported that serviced apartments offer professionals “better security, less hassle and with better facilities.” They also allow for avoidance of lease negotiations and the challenges of obtaining a VAT invoice, unlike traditional leases. There are also, “systematic, professional promotions and incentives.”
He also pointed out that the serviced apartment market has been more resilient than other markets, such as the office rental market. Office space rental prices shot up four years ago, then crashed in mid-2009, while serviced apartment rental prices have experienced steady growth. In addition, occupancy of the apartments recovered more quickly than in the office space market.
by Property Report Asia
CBRE Vietnam managing director Marc Townsend presented the company’s December report at the “Vietnam Serviced Apartment Investment Conference 2011,” saying that pressures on the market include “falling rents and fewer tenants due to the worsening economic situation, as well as stiff competition from individuals buying apartments for sublease.”
Still, Vietnam will see an increase in younger, short-term foreign professionals in the coming years, target consumers for serviced apartment. There are only 3,595 existing serviced apartment units in Ho Chi Minh City, while the number of work permits for foreigners in the city last year jumped to 6,700, excluding ‘grey’ expats, or those working without permits, Townsend said during the conference, according to Tuoi Tre News.
Townsend reported that serviced apartments offer professionals “better security, less hassle and with better facilities.” They also allow for avoidance of lease negotiations and the challenges of obtaining a VAT invoice, unlike traditional leases. There are also, “systematic, professional promotions and incentives.”
He also pointed out that the serviced apartment market has been more resilient than other markets, such as the office rental market. Office space rental prices shot up four years ago, then crashed in mid-2009, while serviced apartment rental prices have experienced steady growth. In addition, occupancy of the apartments recovered more quickly than in the office space market.
by Property Report Asia
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