Hai Phong (VNS/VNA) - Hai Phong's propertymarket is expected to develop strongly with supportfrom infrastructure development, higher foreign investment and economicgrowth, according to Savills.

In the first half of 2023, Hai Phong's gross regional domesticproduct (GRDP) grew by 9.9% year-on-year, 6.2 percentage points higher than thenational average. It ranked third nationally and first in the Red River Delta.By 2025, Hai Phong is set to have a 6.4% share of the national GDP, increasingfrom 3.9% in 2022.

During the first six months, the northern coastalcity attracted 1.98 billion USD in foreign direct investment (FDI),increasing by 80% year-on-year. Rising FDI and investment projects in Hai Phongare likely to generate demand for affordable housing developments that cater toworkers and professionals.

Meanwhile, Hai Phong ranked third in the ProvincialCompetitiveness Index (PCI) 2022 with a score of 70.7, only behind QuangNinh and Bac Giang provinces. Its continuously high PCI score reflects itsfavourable business environment and potential for future investment.

Besides that, Hai Phong actively invests in infrastructure, whichspurs provincial competitiveness and economic growth. Ongoing and plannedprojects comprise expressways, ring roads, ports, and bridges.

Total public investment in 2023 is estimated to exceed 22 trillionVND (929 million USD). In the first half of the year, Hai Phong disbursed 8trillion VND (338 million USD).

This coupled with its strategic positioning in the northerneconomic triangle (Hanoi - Hai Phong – Quang Ninh) and abundant resources,means the city has significant potential for further development.

Hai Phong's industrial market comprises 2,634 ha of net leasablearea (NLA) across 12 industrial parks. A further 2,473 ha is expected fromseven projects between 2023 and 2025. Industrial development will spurresidential and commercial demand given the growing workforce, expatcommunities, and increasing wealth levels.

This port city is home to Dinh Vu - Cat Hai economic zone. Itoffers investment incentives like import and export tax exemptions for goodsand corporate income tax exemptions and reductions for as long as 15 years.Foreign and local investment will have a ripple effect, which will createinteresting business opportunities in Hai Phong for developers, investors andservice providers.

Housing demand will continue to increase, greatly influenced byindustrial park development with labour force recovery, FDI growth, andinfrastructure improvements. As the city expands, commercial and hospitalitydemand will also grow, said Do Thu Hang, senior director, Advisory Services,Savills Hanoi.

“There is room for investors and developers to capitalise on realestate in Hai Phong. Sectors are diverse and speak to players from logisticsand port development to residential developers looking to explore emerging segmentslike worker housing,” Hang said.

Apartment stock reached 11,969 units from 11 projects, increasingby 5% year-on-year, 1 percentage point higher than in Hanoi. Le Chan districthad the largest share at 46 %. The average primary asking price was 45 millionVND, 15% lower than in Hanoi. Meanwhile, since 2019, primary prices haveincreased by 8% each year.

From the second half of 2023 onward, 25,100 units are scheduled.Thuy Nguyen district will have a 56% share of future supply, unsurprisingconsidering its large land banks and IPs, including Nam Cau Kien and VSIP HaiPhong.

Thuy Nguyen will become a city by 2025, like Thu Duc city in Ho ChiMinh City. As the new administration and political centre of Hai Phong, it willhave significant residential demand, which mega projects like Vinhomes Vu YenIsland.

Given Hai Phong's active industrial segment, it has an establishedserviced apartment market. Sunflower International Village (developed by LGInternational) was the first project and opened in 1998. Stock of 1,500 unitswas second only to Hanoi in the North. Ngo Quyen district had a 66% share ofstock. Occupancy remained high at 70%, and rent reached 532,000 VND per sq.mper month, improving by 7% year-on-year.

From the second half of the year, 113 units will enter from twoprojects. Both are international brands. As the city continues to receive goodFDI inflows, it will have more expats, driving demand for servicedapartments. 

Office stock of 173,000 sq.m NLA from Grade B and C officesincreased by 4% year-on-year; growth averaged 2% per annum from 2019 to thefirst half of 2023. Occupancy is high at 91%, but rent is competitive at 238,000VND per sq.m per month.

Hai Phong's growing economy and rising foreign direct investmentmean there are upscale projects in the pipeline like May Legend. Increasing FDIenterprises and demand for office space in the city centre highlight Hai Phong'semerging commercial potential, Hang said./.