Ha Noi Projected to See Over 2,000 New Serviced Apartments in the Next 3 Years

• The increase in FDI has positively impacted the serviced apartment market both directly and indirectly. In addition to attracting investment and developing serviced apartment projects, Ha Noi has witnessed increasing demand for this segment, driven by a significant influx of professionals working in nearby industrial zones.  
• Additionally, provinces such as Bac Ninh and Hai Phong have the potential for serviced apartment development. Projects in these areas should be meticulously planned and developed with quality amenities to attract and retain tenants. 

According to Ms Do Thi Thu Hang, Senior Director, of Advisory Services at Savills Ha Noi, foreign direct investment (FDI) has a dual impact on the serviced apartment market. Firstly, foreign investors directly fund serviced apartment projects. For instance, the serviced apartment sector in Ha Noi has witnessed numerous large-scale projects developed by Korean and Japanese investors, such as Lotte Center Lieu Giai, Lotte Mall West Lake, Keangnam Landmark 72, Roygent Parks, and The Authentic Haseko Long Bien. Developers focus on Class A serviced apartments to cater to foreign professionals from countries such as Japan, South Korea, and Singapore who come to Viet Nam for long-term assignments. These apartments are fully equipped with amenities, providing a ready-to-move-in solution. The projects also offer support services for individuals and families seeking long-term stays. 

Secondly, FDI indirectly impacts the serviced apartment market by increasing demand for this segment. 

Specifically, the industrial real estate market has been attracting significant FDI. Viet Nam has garnered attention from major foreign investors and companies such as Samsung, LG, and Foxconn. As of September 2024, Viet Nam has attracted a total of US$24.8 billion in committed FDI, with 2,492 new registered projects worth US$13.6 billion. The Northern region accounts for the largest share, with approximately 59% of newly registered FDI in manufacturing, amounting to US$5.3 billion across 472 new projects. 

As FDI increases, the demand for land leases and ready-built factory rentals has also risen, particularly in developed or emerging areas such as Bac Ninh, Hai Phong, and Bac Giang. Bac Ninh stands out as the leading region in attracting FDI, accounting for 18%, equivalent to US$4.5 billion. Additionally, Bac Ninh boasts the largest ready-built factories and warehouses in the North, making up 40% of the total supply, followed by Hai Phong at 33%. Other nearby areas, such as Vinh Phuc, Thai Nguyen, and Ha Nam, are also notable. 

Analysing the correlation between industrial real estate development and the serviced apartment sector, Ms Hang stated: “When companies invest in land, factories, or ready-built warehouses, they often send their experts to work on-site. Initially, these experts tend to consider serviced apartments as their accommodation option.  They prefer Ha Noi serviced apartments due to the abundance of amenities, including housing, entertainment, and schools for their children.” Moreover, the continuous improvement of transport infrastructure facilitates the daily commute of these professionals from serviced apartments in Ha Noi to nearby industrial zones. 

Addressing the market demand, Ms Hang stated: “In the future, Ha Noi’s serviced apartment market will maintain its prominent position. Over the next three years, approximately 2,000 serviced apartments will enter the market. Popular areas such as Tay Ho and Ba Dinh will continue to see significant supply, with Tay Ho Tay in particular projected to contribute a considerable portion of the aforementioned 2,000 units.” 

Additionally, provinces such as Bac Ninh, Bac Giang, Thai Nguyen, Hai Phong, and Quang Ninh, known for their FDI attraction, are witnessing investors' interest in developing high-quality serviced apartments. These projects aim to feature international operators, diverse amenities, and comprehensive services to compete with Ha Noi’s market in catering to professionals working locally. These regions benefit from well-established infrastructure, including international schools, high-quality hospitals, and golf courses.