Exploring Advantageous Operational Strategies for 2024

Despite a slow 2023, future supply is expected from 2024. With an influx in quality supply, developers must understand how to keep their operational assets competitive.

OFFICE

Increased demand for green offices

Savills Market Brief Q4/2023 highlights that developments with green certificates are popular and had the most transactions in 2023. Ms Hoang Nguyet Minh, Senior Director of Commercial Leasing, Savills Ha Noi notes that European, Japanese, and Singaporean enterprises are actively seeking environmentally sustainable office spaces, which is positive for green-certified office projects in the pipeline.

Tenants prioritise high-quality projects, creative spaces, and best-in-class services so that they can meet sustainability goals and uphold employee wellbeing. As a result, developers are now more proactive in developing green projects to meet tenants' changing demands. By 2026, in Ha Noi, 15 projects are expected, and green offices will have an 18% share of the new supply.

Proptech, smart building management systems or renewable energy mechanisms in new and existing projects improve environmental performance and reduce operating costs. As the demand for energy efficiency becomes more urgent, developers will need to apply new management technologies.

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Pressure on rents for Grade A office buildings

By 2026, more than 389,770 m² from 15 office projects are expected in Ha Noi. Grade A developments will have an 86% share. The extensive project pipeline until 2026 is likely to pressure rents, especially in Grade A projects. This raises the question of how developers can make their projects more competitive.

Ms Luu Kieu Trang, Head of Commercial, Property Management, Savills Ha Noi, noted: "The standards that define Grade A office buildings include location, amenities, design, service quality, and tenant experience. Property managers, in addition to enhancing service quality, encourage developers to host community engagement activities, offering new experiences and added value for tenants. As the office market becomes more competitive, developers must focus on cost optimisation."

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RESIDENTIAL

Urban areas and the expansion of surrounding provinces.

As cities expand, more people are moving to suburban areas. Outlying areas now deliver sound products with good amenities at affordable prices, driving sales. Urbanisation is rising in Viet Nam, driving residential demand in surrounding provinces like Hung Yen and Bac Ninh. These provinces will deliver 203,000 apartments from 2024 to 2026. When location is no longer a competitive advantage, developers must deliver high-quality services.

Ms Pham Thi Trung Ha, Head of Residential, Property Management, Savills Ha Noi, noted that operations at residential projects require the coordination of different stakeholders and departments. Savills standardises all management and operational procedures for each stage of the customer experience, from contract signing and property handover to daily living to ensure refined experiences and satisfaction for residents.

Opportunities for villas and townhouses

By 2026, new projects, particularly those in suburban areas will deliver a significant supply. From 2024 to 2026, rural districts will have a 75% share of the new supply of 14,000 new dwellings.Infrastructure developments like Ring Roads 3.5 and 4 support real estate, especially in outlying districts and provinces.

Developers must be prepared to remain competitive. They must identify the factors that attract buyers to villa and townhouse properties in Ha Noi.

Occupiers want a balance between privacy and community engagement. With experience in managing large villa and townhouse projects like Starlake, Mailand Hanoi City, and Vista Lago, Savills prioritises security and safety while hosting diverse interactive activities, fostering opportunities for residents to connect and form a tight-knit community.

Investors want services and amenities that ensure the value of their property is upheld. Savills delivers pre-operational consultancy packages, providing early recommendations for developers regarding design and layout arrangements to enhance the project's value and streamline future operational activities.

CONCLUSION

The evolving landscape of the real estate market in 2024 presents both challenges and opportunities. Savills delivers tailored consultancy and management services, ensuring developers can navigate the changing dynamics effectively. As the market embraces sustainability andinnovation, our focus on operational excellence and customer satisfaction will continue to drive success.

Savills is one of the leading providers of consultancy and property management services in Viet Nam with a team of experts and operating procedures that meet international standards, while complementing the needs of customers and complying with Vietnamese law. Our expert team covers all sectors, including technical, accounting, operations, training, customer care, and health, safety, and environment (HSE). Our services are tailored to each project and developer.

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