FDI Growth Boosts Industrial Real Estate And Serviced Apartments

Ha Noi’s serviced apartment market maintained steady demand, supported by strong FDI inflows and the expansion of industrial parks.  

Grade A and Grade B apartments have higher occupancy QoQ, while Grade C is the only segment to decrease. 

IMPROVED SERVICED APARTMENT PERFORMANCE 

According to Savills Q4/2024 Market Brief, the serviced apartment sector continued to improve. The total stock reached 6,246 units across 64 projects, remaining stable quarter-on-quarter (QoQ) and increasing by 3% year-on-year (YoY) following the entry of Swiss-Belresidences Ha Noi in Q3/2024. Occupancy improved by 2 percentage points (ppts) QoQ and YoY to 84%. 

Grade A and B apartments had higher occupancy QoQ, while Grade C declined 2 ppts. Average rentals rose by 1% QoQ and 2% YoY, with rents in Grade C being the only segment to decrease. 

2 KEY DRIVERS BOOST DEMAND FOR SERVICED APARTMENT IN HA NOI 

1. FDI Growth  

The increasing foreign direct investment (FDI) inflows and demands from industrial parks have contributed to the growth of this segment. Matthew Powell, Director, Savills Ha Noi, said: “The expansion and development of industrial parks in Ha Noi, coupled with strong FDI inflows, are driving significant demand for serviced apartments.” 

National Statistics of Viet Nam revealed that Viet Nam attracted a total registered FDI of US$38.2 billion with 3,375 newly registered projects. Implemented FDI capital stood at US$25.4 billion, marking a 9% YoY increase and the highest level recorded to date. Ha Noi drew US$2.2 billion in FDI from 293 newly registered projects, a 30% YoY increase, placing it fifth nationwide behind Bac Ninh, Hai Phong, HCMC, and Quang Ninh. 

2. The Expansion of Industrial Parks  

By November 2024, the planning task of three new industrial parks (IPs) in Thuong Tin and Soc Son was approved, covering a combined 600 ha. These include North Thuong Tin IP (137 ha), Phung Hiep IP (175 ha), and Soc Son IP (324 ha). The 10 operational industrial parks cover 1,300 ha, with nine achieving full occupancy.   

The increasing FDI and expansion of IPs attracted more tenants to the serviced apartment market, particularly experts, foreign professionals, engineers, and technicians working in these areas. For example, Bac Ninh, where 6,000 enterprises have been certified to employ foreign workers with nearly 15,000 individuals granted or renewed work permits.    

THE PROSPECT OF HA NOI’S SERVICED APARTMENT MARKET  

1. Future Supply from 2025 onwards  

• 17 new projects to add 4,077 units 
• 7 projects in 2025 to deliver 2,889 units 
• Tay Ho View Complex (Grade A) - the largest supply 
• 162 units expected in Tay Ho District in 2026 

83% of future supply in Secondary areas, 17% in the West.  

2. Key Players  

Notably, branded operators will dominate the market, accounting for 87% of the future supply. Key players entering the market include The Ascott, Lotte Group, PARKROYAL Serviced Suit Ha Noi, Shilla Hotels and Resorts, Hilton, and Hyatt.