Hải Phòng's property market is expected to develop strongly with support from infrastructure development, higher foreign investment and economic growth, according to Savills.

 

In the first half of 2023, Hải Phòng's gross regional domestic product (GRDP) grew by 9.9 per cent year-on-year, 6.2 percentage points higher than the national average. It ranked third nationally and first in the Red River Delta. By 2025, Hải Phòng is set to have a 6.4 per cent share of the national GDP, increasing from 3.9 per cent in 2022.

 

During the first six months, the nothern coastal city attracted foreign direct investment (FDI) of US$1.98 billion, increasing by 80 per cent year-on-year. Rising FDI and investment projects in Hải Phòng are likely to generate demand for affordable housing developments that cater to workers and professionals.

 

Meanwhile, Hải Phòng ranked third in the Provincial Competitiveness Index (PCI) 2022 with a score of 70.7, only behind Quảng Ninh and Bắc Giang. Its continuously high PCI score reflects its favourable business environment and potential for future investment.

 

Besides that, Hải Phòng actively invests in infrastructure, which spurs provincial competitiveness and economic growth. Ongoing and planned projects comprise expressways, ring roads, ports, and bridges.

 

Total public investment in 2023 is estimated to exceed VNĐ22 trillion (US$929 million). In the first half of the year, Hải Phòng disbursed VNĐ8 trillion (US$338 million).

 

This coupled with its strategic positioning in the northern economic triangle (Hà Nội - Hải Phòng – Quảng Ninh) and abundant resources, means the city has significant potential for further development.

 

Hải Phòng's industrial market comprises 2,634 ha of net leasable area (NLA) across 12 industrial parks. A further 2,473 ha is expected from seven projects between 2023 and 2025. Industrial development will spur residential and commercial demand given the growing workforce, expat communities, and increasing wealth levels.

 

This port city is home to Đình Vũ - Cát Hải economic zone. It offers investment incentives like import and export tax exemptions for goods and corporate income tax exemptions and reductions for as long as 15 years. Foreign and local investment will have a ripple effect, which will create interesting business opportunities in Hải Phòng for developers, investors and service providers.

 

Housing demand will continue to increase, greatly influenced by industrial park development with labour force recovery, FDI growth, and infrastructure improvements. As the city expands, commercial and hospitality demand will also grow, said Đỗ Thu Hằng, senior director, Advisory Services, Savills Hanoi.

 

“There is room for investors and developers to capitalise on real estate in Hải Phòng. Sectors are diverse and speak to players from logistics and port development to residential developers looking to explore emerging segments like worker housing,” Hằng said.

 

Apartment stock reached 11,969 units from 11 projects, increasing by 5 per cent year-on-year, 1 percentage point higher than in Hà Nội. Lê Chân had the largest share at 46 per cent. The average primary asking price was VNĐ45 million, 15 per cent lower than in Hà Nội. Meanwhile, since 2019, primary prices have increased by 8 per cent each year.

 

From the second half of 2023 onward, 25,100 units are scheduled. Thủy Nguyên District will have a 56 per cent share of future supply, unsurprising considering its large land banks and IPs, including Nam Cầu Kiền and VSIP Hải Phòng.

 

Thủy Nguyên will become a city by 2025, like Thủ Đức City in HCM City. As the new administration and political centre of Hải Phòng, it will have significant residential demand, which mega projects like Vinhomes Vũ Yên Island.

 

Given Hải Phòng's active industrial segment, it has an established serviced apartment market. Sunflower International Village (developed by LG International) was the first project and opened in 1998. Stock of 1,500 units was second only to Hà Nội in the North. Ngô Quyền District had a 66 per cent share of stock. Occupancy remained high at 70 per cent, and rent reached VNĐ532,000 per sq.m per month, improving by 7 per cent year-on-year.

 

From the second half of the year, 113 units will enter from two projects. Both are international brands. As the city continues to receive good FDI inflows, it will have more expats, driving demand for serviced apartments. 

 

Office stock of 173,000 sq.m NLA from Grade B and C offices increased by 4 per cent year-on-year; growth averaged 2 per cent per annum from 2019 to the first half of 2023. Occupancy is high at 91 per cent, but rent is competitive at VNĐ238,000 per sq.m per month.

 

Hải Phòng's growing economy and rising foreign direct investment mean there are upscale projects in the pipeline like May Legend. Increasing FDI enterprises and demand for office space in the city centre highlight Hải Phòng's emerging commercial potential, Hằng said. —VNS