Press Release

CBRE Releases 2023 Vietnam Real Estate Market Outlook in Hanoi

Turbulence amidst the Recovery

February 17, 2023

Media Contact

Ha Dinh

Associate Director, National Head of Marketing & Communications, Vietnam

Photo of ha-dinh

Hanoi – 17 February 2023

Hanoi Residential Market 

In 2022, there were approximately 15,100 condominium units launched in Hanoi, down 12.3% y-o-y. This marked the third year of declining new supply because of various factors including COVID-19, credit tightening and licensing issues. In terms of segment, this is the first time since 2011, the new launch from high-end segment exceeded other segments to lead the new launch. During the year 2022, the high-end products covered 55% of total launched supply, followed by mid-end segment (44%). In terms of location, the West hosted the largest new supply after two years lost its position to the East due to the launches from projects in Vinhomes Smart City. This residential cluster made up 52% of new launch during the year followed by the East (35%) and the South (9%).


The number of sold units in 2022 were maintained at a relatively positive level, reaching 16,600 units, exceeding the new launch. Noticeably, 65% sold units during the year was recorded in the first half of 2022. The sales performance has been negatively impacted by recent credit tightening issues and rising interest rate environment at the year-end leading to slower sales speed.

The primary prices of Hanoi condominiums averaged US$1,934 psm (net of VAT and maintenance fee) by the end of 2022, up by 21.2% y-o-y due to a higher share of high-end products in the total stock available for sale. Over the past three years, as new launch supply was maintained at low levels, various locations in the city have witnessed upgraded positioning and thus increased prices, especially under the context of rising interest rates and inflation recently. In secondary market, the average selling prices as of Q4 2022 reached US$1,303 psm up by 7.5% y-o-y, but down 2.8% q-o-q. This is the first quarter when the market recorded a q-o-q decline after four consecutive quarters of pricing growth. The quarterly decrease mainly comes from projects that have been handed over for a long time.

Moving forwards, the level of new launch in 2023 is expected to be slightly lower than or at the same range as those of 2022, reaching around 14,000 – 16,000 units. Sold units are expected to sustain at similar level as 2022’s while the new supply level has not recovered. Primary prices are forecasted to increase at 4 -7% per annum over the next three years driven by upgraded positioning in township developments and expected launches of high-end and luxury projects in prime locations.

For landed property segment, the market recorded the official launch of Vinhomes Ocean Park (VOCP) 3 – The Crown in the last quarter of 2022. In Q4 2022, there were a total of 5,587 units newly launched from 3 projects. Total accumulated landed units launched in 2022 reached a record high, staying at 16,249 units which became the highest launch in Hanoi within the last 5 years, even surpassed Hanoi’s total new launch of condominium units this year. Majority of new launch in 2022 came from the mega townships VOCP2 and VOCP3 developed by Vinhomes. 

Sales rate and selling price of Hanoi landed property market in Q4 2022 took a hit from the effects of tightening of lending and credit bond issue. In terms of sales rate, it was estimated that 1,136 units were sold during the quarter which was only one-fifth of the units sold in Q3. Average sales rate of 2022 was estimated at around 60%. Meanwhile, after a high-growth phase lasting from Q4 2021 to Q3 2022, landed secondary price began to decline from Q4 2022. The average price in secondary market (inclusive of construction costs and exclusive of VAT) has fallen 8% from its peak in Q3 2022 and recorded at roughly US$ 6,800 psm, By district, resales price recorded a drop rate ranging from 2% to up to 16% compared to Q3 2022, among which districts with recent booming development in terms of landed projects including Ha Dong, Hoang Mai and Dong Anh witnessed a stronger decline rate.

Current macro headwinds including rising interest rate and tightened credit will highly likely result in delays of launch of several upcoming projects, as well as delays in construction progress of existing projects. It is expected that from 2023 onwards, Hanoi landed property market will continue to welcome new launches from VOCP3 and several other new projects including Mailand Hanoi City in the West and Vinhomes Co Loa in the North. Total units launched in the coming time is expected to be over 16,000 units. In terms of secondary price, upon the assumption that the situation regarding interest rate and credit crunch will be more stabilized in the second half of 2023, the downward trend may continue until the end of Q2 2023 before price begins to rise again from 2024.

Notes on CBRE condominium ranking criteria:
1. Ultra-luxury: projects that have primary prices over US$12,000 psm
2. Luxury: projects that have primary prices from US$4,000 psm to less than US$12,000 psm
3. High-end: projects that have primary prices from US$2,000 psm to less than US$4,000 psm
4. Mid-end: projects that have primary prices from US$1,000 psm to less than US$2,000 psm
5. Affordable: projects that have primary prices under US$1,000 psm

Average Primary Price: US$ psm (excluding VAT and maintenance fee, quoted on NSA), including all projects available for sales 

Hanoi Office Market

During 2022, the Hanoi office market welcomed one Grade A and one Grade B projects, with a total NLA of 27,000 sqm, in the CBD and West areas, respectively. By the end of the review period, Hanoi's total office supply had surpassed 1.626 million sqm NLA, with Grade A projects accounting for 37% of total supply. The Hanoi market only saw a moderate net absorption rate of more than 36,000 sqm for the whole year due to the supply being relatively constrained. Net absorption is expected to improve in upcoming quarters when new projects are scheduled to come into operation in Q1 2023.

The fourth quarter of 2022 was a quiet quarter for the office market, with rents and vacancy rates in both grades remaining stable from the previous quarter but still better than those of 2021. As of Q4 2022, Grade A and Grade B office asking rents remained unchanged to previous quarter, reaching US$25.9/sqm/month, a 5.2% increase y-o-y, and US$14.5/sqm/month, a 4.0% increase y-o-y, respectively. In terms of vacancy rates, Grade A office vacancy has dropped to 27.6%, down 0.7 ppts q-o-q and 3.7 ppts y-o-y. Meanwhile, vacancy rates in Grade B have fallen to 11.6%, a 0.3 ppts decrease q-o-q and a 1.1 ppts increase y-o-y due to the new launch in the previous quarter. The reported rents and vacancy rates of Grade A offices in Hanoi includes the impact of the Technopark Tower which is located in a rural location in Hanoi. Excluding this project, average rents and vacancy rates of Grade A would have been US$28.7 and 15.3%, respectively.  


In term of leasing purposes, office expansion demand, which accounted for more than 43% of all CBRE transactions in Hanoi in 2022, continued to contribute to the majority of transactions. In terms of tenants’ industries, IT/Tech continued to rule the market, accounting for 35% of all transactions in Hanoi. Banking, finance, and insurance come in second and third, with percentages of 18% and 15%, respectively. The West is the most desired location for these industries, accounting nearly 50% of total enquiries received by CBRE in 2022, followed by the Midtown and the CBD. Meanwhile, selected tenants in commerce or real estate sectors have contracted the space or delayed their expansion plans. 

In Q1 2023, the Hanoi office market is scheduled to welcome two Grade A office projects and one Grade B office project, bringing total new supply during this reviewed period to 73,600 sqm NLA. Rents in both grades are anticipated to remain stable as landlords are being more cautious to the macroeconomic headwinds. Abundant supply is also anticipated to put pressure on vacancy rate as well.

Hanoi Retail Market

In 2022, Hanoi retail market showed its growth momentum and strong recovery after Covid-19 pandemic. According to the General Statistics Office, Vietnam’s total sales of consumer goods and services in 12M of 2022 was estimated at VND 5,679 trillion, posting a nearly 20% growth y-o-y and a 15% increase compared to pre-pandemic level in 2019. 

In Q4 2022, Hanoi welcomed the operation of The Zei Plaza in the West of Hanoi. Total accumulated net leasable area (NLA) of Hanoi Retail market at the end of 2022 increased to 1,070,239 sqm with 2 new supplies coming from Vincom Mega Mall Smart City and The Zei Plaza, both of which located in Nam Tu Liem District.

In terms of market performance, by the end of 2022, average asking price on the ground floor and first floor (excluding service charges and VAT) of CBD retail spaces recorded at US$ 144/sqm/month, up by a significant 36.4% y-o-y due to no new supply. This is the highest level of rents ever recorded in CBD locations. On the other hand, vacancy rates of the area in this quarter saw a drop from Q3 2022 on account of the re-merchandising within Vincom Center Ba Trieu – Tower 2, leading to a series of openings from several new tenants including Uniqlo, ADLV, Nine West. CBD vacancy rates in 2022 was estimated at 4.8%, down by 5.4 ppts q-o-q and 1.4 ppts y-o-y.

For non-CBD locations, the average asking rent reported at US$ 27/sqm/month, equivalent to an increase of 12.4% y-o-y. Thanks to the robust expansion activities of retailers at the end of the year, non-CBD vacancy rates also went down by 8.1 ppts q-o-q and 3.2 ppts y-o-y. Major openings from retailers in non-CBD area included the openings of 2 Uniqlo stores in Vincom Center Tran Duy Hung and Vincom Mega Mall Royal City.

Hanoi retail market this year has welcomed entrants from several major brands including Breitling, Marc Jacobs, Berluti, Benjamin Barker and ADLV, proving the continuing interest from foreign retailers in Hanoi and Vietnam market. Prime retail spaces on Ly Thai To and Trang Tien streets were the most sought-after locations by tenants, especially by luxury brands. Meanwhile, existing retailers in different industries such as Uniqlo, Kenzo, Nine West, Starbucks, Pizza 4p’s, Aeon MaxValu, … continued to expand their presence in Hanoi by opening new stores at major shopping centers and retail podiums across the city.

It is expected that an additional supply of as much as 300,000 sqm of NLA of retail space will be put into operation during 2023-2025. Majority of these projects are concentrated on non-CBD locations, among which two large-scale projects, Lotte Mall Hanoi and Aeon Mall Hoang Mai, are expected to provide a total of more than 150,000 sqm NLA of retail space.

Looking forward, CBRE anticipates that rents will continue to increase but at a slower pace. Concerns about continuing inflationary pressures may put pressure on both consumer spending and asking rents of the retail market. Due to the scarcity of retail space in CBD area, a new trend is expected to form in the commercial market, in which retailers will seek locations in non-CBD areas to launch pop-up stores while continuing to look for prime locations and sustainable positions.

Northern Industrial Market

Over the course of 2022, Northern industrial markets sustained the positive performance. By the end of 2022, the industrial land supply of Tier-1 markets in the North reached 10,291 ha, up 8% y-o-y. Bac Ninh and Hung Yen are two provinces recorded new industrial parks coming into operation.

Due to strong demand from various sectors, average occupancy rates of Tier-1 markets in the Northern region reached 83.2% as of Q4 2022. The net absorption of the whole year 2022 was at 519 ha, which was similar to 2022’s net absorption. The most active tenants in the North include electronics, solar-energy, automobiles manufacturers and ready-built warehouse and ready-built factory developers.

In terms of rental rates, the average industrial land rental rates of Tier-1 markets in the North stayed at US$120/sqm/remaining terms up by 11% compared to that of 2021. During the year, selected industrial parks in Bac Ninh and Hung Yen significantly increased the rental rates as occupancy improved leading to the highest market rental growth over the past 5 years when the rental growth typically ranged between 6% - 7% pa. Meanwhile, in the South, the average rent of Tier-1 markets increased by 8-13% year-on-year and reached US$166/sqm/remaining terms by the end of 2022, about 38% higher than those of the North.

For the ready-built warehouse (RBW) and ready-built factory (RBF), the market witnessed a strong growth in supply in the past year. The total supply of RBW and RBF in the Tier-1 markets in the North increased by 19% and 26% y-o-y, respectively: reaching 1.5 million sqm of RBW and 1.7 million sqm of RBF. Due to the rapid increase in new supply, the occupancy rate of RBW decreased by 7.0 ppts y-o-y to 87%, while the average occupancy rate of RBF stood at 84%, down 3.5 ppts. However, due to good demand from industries such as automobiles and components, logistics, and electronics, absorption rates of both segments recorded y-o-y growth, reaching 118,000 m2 for RBW and 242,000 m2 for RBF, totaling up by nearly 50% y-o-y. The average rent of RBF and RBW of Tier-1 markets in the North reached US$4.7/sqm/month, up by 2% y-o-y.

Within the next three years, supply of industrial land will be increasing by more than 3,500 ha for Tier-1 markets. Due to the improvement in infrastructure system, industrial markets in the North are anticipated to expand to Tier-2 markets such as Thai Binh, Quang Ninh, etc. In 2022, CBRE recorded higher net absorption in Tier-2 markets showing this trend has happened and will continue in upcoming years. With relative strong demand supported by continued production shift and China-plus One strategy of manufacturers, industrial park land rents in tier-1 markets are expected to increase by 5-10% in 2023.

Note: Tier-1 markets in the North include Hanoi, Hai Phong, Hai Duong, Hung Yen, and Bac Ninh.

Disclaimer: All materials presented in this report, unless specifically indicated otherwise, is under copyright and proprietary to CBRE. Information contained herein, including projections, has been obtained from materials and sources believed to be reliable at the date of publication. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty, or representation about it. Readers are responsible for independently assessing the relevance, accuracy, completeness and currency of the information of this publication. This report is presented for information purposes only, exclusively for CBRE clients and professionals, and is not to be used or considered as an offer or the solicitation of an offer to sell or buy or subscribe for securities or other financial instruments. All rights to the material are reserved and none of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party without prior express written permission of CBRE. Any unauthorised publication or redistribution of CBRE research reports is prohibited. CBRE will not be liable for any loss, damage, cost or expense incurred or arising by reason of any person using or relying on information in this publication.

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