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Written by Administrator   
Tuesday, 07 March 2006
Article Index
Residential acommodation
Page 2- Hanoi overview
Page 3- National overview
Page 4- Short Term Future
page5-Medium Term Future
page 6 -Infrastructure Improvements

Hanoi

Hanoi is a relatively small province (921sq.km compared with HCMC's 2,095 sq.km) with 12 Districts : Soc Son, Dong Anh & Gia Lam - northeast of the Red River (663 sq.km) - and Tu Liem, Thanh Tri, Tay Ho, Cau Giay, Thanh Xuan, Hai Ba Trung, Dong Da, Hoan Kiem and Ba Dinh – of which the last 7 represent the central and ancient core (84 sq.km)

This central part of Hanoi is densely populated with about 1.5 million people and the Director of the local Management of Urban Projects recently said, "There is nowhere in the world like Hanoi with houses less than 10 square metres or 1 metre wide." The residents of these extraordinary houses that are deemed too thin and poten­tially dangerous are now being be encouraged to either sell up to their neighbouring owners or hand them over to city authorities.

A recent survey by the Hanoi 's Land & Housing Service stated that the majority of 4-6 storey apartment blocks in Hanoi were in serious states of disrepair. Many of these blocks were built in the 1960's and 5% must be destroyed as soon as possi­ble, while 62% are in need of upgrades. Hanoi has 67 residential areas, of which 42, with a total area of 53,500 square metres, are on the list for urgent improvement. The main rea­sons for the deterioration include illegal changes to the designs (expanding) and sinking caused by weak foundations. In a recent "Housing Environ­ment & Basic Environment in Hanoi ? seminar, experts said that about 40% of Hanoians are living in houses in a poor condition and with a bad environment. The seminar was the first one to discuss the environ­ment of people living in the old residential quarters and the ancient streets of Hanoi . No sunlight, not enough fresh water, regular flooding, no playgrounds for children, and no easy access for firefighting services were considered the main problems. An area of particular concern was Hanoi 's Old Quarter, which was established in the 11 th Century on an area of only 180 hectares but occupied by more than 85,000 resi­dents. The capital city's population has increased remark­ably in recent decades. The city was home to more than 3 million in 2004, with an average density of 17,868 people per kilometre. How­ever, this rate is much higher in the central districts. The most densely populated is Hoa n Kiem District and especially Hang Bo Commune. The high density popula­tion results in the fact that each person in these areas have an average living space of only 2 square metres. This has hit the city's infrastructure system hard, especially in the Old Quar­ter, where many generations still live in the same house together. Many families often share just one toilet and an alley only 1 metre ­wide. The city's outdated fresh water supply pipeline can only satisfy 40-50% of demand, while the drainage system in these living quar­ters is a major cause of local environmental pollution.

Serviced Apartments

Hanoi only has a current combined stock of serviced apartments of about 1,400 – which is around 600 less than in HCMC. Most of the units are in foreign invested joint venture buildings and over 5 years old – which means that they were / are 1 st Generation property investments. Because very few new units have been added over the last 5 to 10 years, vacancy rates have always been low and there has / is / will always be a large core of affluent expatriates eg diplomats & country managers, living in the capital city, who demand and can afford Grade A type serviced apartment accommodation.

Occupancies have been over 90% at all of the larger established, foreign apartment properties since about 2002, which in many respects should be regarded as full occupancy, given the transitional nature of most expatriates employment in Vietnam; the short term nature of leases in Vietnam and with many properties even offering daily rates; and due to on-going maintenance and improvement programmes. Rental rates are therefore high, and given the absence of significant additions to the total stock for a few more years, look set to rise even more as demand for city centre accommodation will continue to far outstrip the supply.

However, for those willing to live a 10-20 minutes drive from work in a central office building, the market could slow down a little, with the opening of the Manor's 500 units and Ciputra International City's first 300 apartments & 400 villas, much of which, although being sold off on the local market, will reappear on the secondary market, as investors seek a rental return on their investment.

Several other apartment buildings like Elegant Suites on Quang Turng (44 units being locally developed); the USD$40 million Pacific Place on Ly Thuong Kiet in Hoan Kiem (191 unit project originally licensed in 1994 as a five star hotel to a joint venture between Ever Fortune Industrial of Taiwan and two Vietnamese companies); the 80 unit Skyline Building on Truc Back Lake adjacent to West Lake; and the DMC Building opposite the Daewoo Hotel in Ba Dinh; the 26 floor ICC Building on Nguyen Chi Thanh in Dong Da, and Syrena on Xuan Dieu in Tay Ho, are due to open soon, some of which are being sold off on long term leases for a capital sum, with the ‘sub-investors' oftern buying to lease.

Other residential developments due to start soon are the USD$80 million Golden Westlake Executive Residences, (375 units & 16 villa Ha Viet-Tung Shing Joint Ven­ture between Tung Shing Group of Taiwan, which is contributing 70% of the capital and Ha Noi Leather and Footwear & Viet Tien Garment companies), and the USD$115­million Hanoi City Complex - which is scheduled for completion in 2009. The new supply of internatonal standard apartment accommodation will be about 2,000 unts in 2006 and 750 in 2007 and 500 in 2008.

Last Updated ( Saturday, 14 October 2006 )
 
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