Jul 2014

Demand sizzles for hot IPH apartments

 

IPH is reporting a significant pickup in sales as homebuyers seek to cash in on the property’s pulling power among expat tenants.

 

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Indochina Plaza Hanoi is the first property in the city boasting penthouses with private swimming pools

As there are only a few apartments left for sale at this mixed-use development, late comers who are looking for a quality home to live in or lease are facing a closing window of availability.

Indochina Land revealed last week that the developer had sold 13 apartments in April, earning nearly $4.3 million in revenue, while time is ticking down with only 15 apartments and four penthouses out of the total 386 units now left for sale.

“As the property market is showing signs of recovery after a long period wallowing in the doldrums, IPH has seen rising demand from buyers and tenants over the last few months,” said Christopher Piro, director of sales and marketing at Indochina Land.

Buyers have also snapped up IPH  apartments following the developer’s pilot conversion of some apartments into serviced residences for lease. The first batch of new serviced apartments sold out in March, encouraging the developer to further experiment with the popular new service.

“This scheme allows buyers to move in to live or lease immediately, without hassles in terms of furnishing or having to seek tenants,” said Piro.

Along with a majority of already happy buyers, other customers are leasing IPH apartments from $1,700 up to $2,500 per month. These pricing levels represent a 20 per cent increase against last year, producing an annual 6 to 8 per cent return on investment for the buyers.

IPH has proven a hot property not only for residents but also tenants with more than 120 units occupied by foreigners, including overseas Vietnamese. The property has proved particularly attractive to Japanese tenants who are ready to pay a high price but have discerning tastes about quality, aesthetics and services.

“The apartments here are built and furnished to international quality standards,” said an unnamed Japanese tenant that has rented a three-bedroom apartment on the 18th floor. “In addition to facilities such as swimming pool, club house and a shopping centre, other services such as cleaning and laundry are provided on request. It’s really comfortable living here and a real relief after a busy working day.”

IPH  has benefited from a strong rental market and prime location. Nguyen Viet Dung, residential leasing manager at CBRE, said serviced apartment buildings in Hanoi were operating at 80-90 per cent occupancy, and if short-term leasing of below three months were taken into account, most serviced residences were fully occupied. Moreover, rental rates remained high, at $1,500-$2,000 for one-bedroom apartments and between $2,000 and $2,500 for three-bedroom units.

Dung said apartment-for-sale projects such as IPH and Keangnam were now an alternative option for tenants who are seeking a quality living environment at prices lower than serviced residences.

According to CBRE, the western districts of Hanoi, where IPH is located, continue to see growing demand from expats, particularly Japanese and South Korean who are working at industrial parks in Hanoi, Vinh Phuc and Thai Nguyen provinces. Demand for quality rental homes in this area of Hanoi are expected to further increase in the coming time as the completion of the Hanoi-Thai Nguyen Expressway has driven up inquiries. Thai Nguyen is home to Samsung’s $2 billion factory along with 50 other component suppliers. Japanese demand looks set to grow further as the developer of Thang Long Industrial Park is working on plans to establish another zone for Japanese investors in Vinh Phuc.

The leasing service at IPH  has been provided by professional agent Vietnam Sotheby’s International Realty, which has a strong network of high-income customers with a taste for quality living environments. Vietnam’s Sotheby has shared its golden customer database with buyers while supporting them in asset management and leasing procedures.

By Tran Son (Vietnam Investment Review)