Thanks to the resilience of leasing properties during market fluctuation, this type of real estate are deemed a long-term investment channel despite the heavy impacts of the Covid-19 pandemic.

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Rental properties became the popular business in metropolises (Illustration: Photo at Oakwood Residence Hanoi)

A “fire testing gold” year to leasing real estate

The year 2021 gradually passed by with prolonged Covid-19 outbreaks; all economic sectors, including real estate, were heavily affected, specifically when social distancing measures were implemented.

More than ever, rental properties faced heavy pressure due to the demand of the whole society “bottoming out” during the pandemic. The vacancy rate of retail space, shop-houses, apartments, and rooms for rent has increased because people tend to return to their hometowns to avoid the pandemic or terminate contracts because of unstable income and inability to pay.

However, in the general gloomy period of the market, serviced apartments for rent are anticipated to be the bright spot when both the occupancy rate and the rental price are ensured.

The reason for this, according to Ms Do Thi Thu Hang, Senior Director, Research & Consulting Division of Savills Ha Noi, is that there is a fixed number of foreign experts staying in Vietnam to work, thus, the demand for long-term apartments for rent still receives positive signals, and the serviced apartment market continues to record stable year-on-year profits.

According to CBRE, it is expected that more than 6,000 serviced apartments will be opened for sale in the fourth quarter of 2021, making the supply amount of the whole year reach about 13,000 units. The expectation on the recovery of the serviced apartment market relies on the vaccination administration process and the shift of foreign direct investment (FDI) cash flow to Vietnam.

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Serviced apartments are the preferred choice of many expatriates (Illustration: Oakwood Residence Hanoi’s serviced apartment developed by Van Phu – Invest)

“FDI would be the main driving force for the growth of serviced apartments market in the future when foreign experts come to Vietnam to work, thus, increasing demand for this type of rental apartment”, said a representative of Van Phu – Invest, a reputable investor in the serviced apartment business.

Besides, experienced investors believe that serviced apartments provide satisfaction to both accommodation needs and relaxation and entertainment needs through upscale facilities and services for customers. Unlike hotels (with no kitchen or living room for personal needs) or ordinary apartments (with no housekeeping, laundry, dining services), serviced apartments emphasize their customers’ individuality to meet the needs of the long-term residence and provide them with all-inclusive services.

For those foreign experts relocating and residing in Vietnam, a serviced apartment is the most suitable option with full facilities, ensuring both luxury and privacy while being more economical than hotels. Under the pressure of the Covid-19 pandemic, the development of serviced apartments tends to focus more on the needs of relaxation and health care, such as integrating gym, yoga, spa, sauna, therapy centres, etc. Therefore, the serviced apartment type is forecasted to have rich potential with more room for development in 2022 and many years to come, especially when there are not many “big names” focusing on this market.

Van Phu – Invest leading the rental real estate market

Early realizing the long-term potential of the serviced apartment business helped investor Van Phu – Invest to embark on a strategic plan to develop this type of business from 2019. After the achievements in developing the urban area segment, creating an abundant supply of apartment products for sale on the market, Van Phu – Invest takes a step forward in the new business field.

“After nearly two decades of establishment and development, with dedication, we desire to create long-standing values for customers, to ensure product quality throughout the operation process, as well as to bring about the best living experience for residents. Those values are the foundation to create the sustainable influence of the project, clearly reflecting the vision and core values of Van Phu – Invest. Thus, the development and business of serviced apartments is a way to help us realize our goals”, a representative of Van Phu – Invest shared.

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Luxurious, aesthetic and artistic space at the Oakwood Residence Hanoi project of Van Phu – Invest

The precise strategy to catch up with the development trend; prestige and stable financial potential; rich urban real estate development experiences; along with the ability to design and construct, manage and operate various housing and commercial projects create outstanding advantages of Van Phu – Invest in the business field of serviced apartment chains.

Typically, the Oakwood Residence Hanoi project was officially put into operation at the end of 2019, which is also the period when Vietnam witnessed the first outbreak of the Covid-19 pandemic. After 2-year-pandemic, the project still brought in stable revenue with a high occupancy rate for investors. Thanks to that, after the success of this project, Van Phu – Invest continues to introduce to the market a new chain of high-class serviced apartments at the Grandeur Palace – Giang Vo project, located at the central administrative, cultural and social of the capital.

The project aims at the upper-class customers with stringent living standards, which will be the ideal place for Van Phu – Invest to create outstanding living values. Those are reflected in the green and tranquil landscape space, smart and aesthetic design, diverse and convenient services; towards the creation of each customer’s individual experience, promising to bring a new “miracle” for this potential business segment in the future.