_Continued deal activity reaffirms Vietnam’s real estate market – Knight Frank
Ho Chi Minh City, 09 July 2025 - Vietnam's Q2 2025 real estate report by Knight Frank highlights sustained momentum across all sectors. Ho Chi Minh City and Hanoi saw solid office leasing and apartment market rebounds after Tết. Industrial land surged with record H1 supply and strong absorption, underscoring Vietnam's appeal. Meanwhile, eased visa policies and new direct international flights continue to support 5‑star hotels in both Ho Chi Minh & Hanoi.
OFFICE
The Ho Chi Minh city and Hanoi office markets maintained positive performances, with several major leasing transactions completed
Asking rents for Grade A offices in Ho Chi Minh city rose to US$60.8 per sq m per month (up 2.7% q-o-q) and US$33.4 per sq m per month for Grade B (up 0.2% q-o-q). The increase of Grade A asking rent is as a result of Marina Central Tower launching this quarter, with 69,400 sq m lease able area making it the largest office building in Ho Chi Minh City, and the third largest in Vietnam after Keangnam Landmark 72 and Capital Place in Hanoi. Total new supply for the quarter is 86,700 sq m, an increase of 4.9% q-o-q and 8.8% y-o-y. Hanoi asking rents for both Grade A and Grade B remained stable, at US$36 per sq m per month for Grade A (down 0.2% q-o-q) and US$19.6 per sq m per month for Grade B (up 0.2% q-o-q).
Average office occupancy in Ho Chi Minh city declined moderately to 86% (down 3.3 ppts q-o-q) due to the addition of new buildings, while Hanoi saw a slight improvement to 84% (up 1 ppt q-o-q). Both markets showed improvements in net absorption compared to Q1 2025, reaching 16,840 sq m (up 91% q-o-q) and 18,700 sq m (up 24% q-o-q), respectively. Multinational corporations in IT/technology, pharmaceuticals, and logistics were the key demand drivers for the office market during this period, with several significant deals concluded with the largest approximately 8,000 sq m leasable area.
Knight Frank highlight that Ho Chi Minh lags behind Hanoi for new construction, with one building, The Lotus Tower, set to launch in 2025 and there are no B grade offices due to come online until 2027.In contrast, Hanoi has seen construction commence on a series of new office developments, mainly in the Midtown and West Westlake areas. By 2025, the capital will welcome four new projects adding 79,800 sq m of total office space which Knight Frank forecasts will increase vacancy in the market to 18.5%.
“New supply in Ho Chi Minh city is very welcome as high-quality office space is limited for multinational companies. This new supply explains why asking rents have remained high in Ho Chi Minh city – but the reality is that discounts and incentives are being offered to tenants, balancing the landlord vs. tenant dynamic and creating excellent opportunities for companies to relocate and upgrade. In Hanoi, the abundant new supply will increase vacancy rates and thus tenants’ ability to leverage on rents even further. The reality now is that office space in Hanoi is less than 50% of the cost of a similar building in Ho Chi Minh city, which is compelling for companies that might be deciding to increase headcount there rather than in the south.” said Alex Crane, Managing Director, Knight Frank Vietnam.
APARTMENT
Positive signs in both Ho Chi Minh city and Hanoi’s apartment markets after a Tet holiday slowdown
The average primary asking price in Ho Chi Minh city reached US$3,729 per sq m, reflecting an increase of 2% q-o-q and 10% y-o-y. New supply in Ho Chi Minh city reached approximately 1,500 units, an increase of 140% q-o-q and 16% y-o-y, with 35% of the new supply classified in the affordable segment. Average asking prices remained flat due to the launch of affordable units lowering the average price while unsold inventory carried into the quarter kept pricing flat.
The average primary asking price in Hanoi rose to US$3,284 per sq m, reflecting increases of 6% q-o-q and 26% y-o-y. The sharp rise was mainly driven by high asking prices of new projects in the Nam Tu Liem and Ha Dong districts. In Q2 2025, Hanoi recorded approximately 7,100 new apartment units in Q2 2025, reflecting a 129% increase q-o-q but a 16% decline y-o-y.
Approximately 2,300 units sold in Ho Chi Minh city, an increase of 230% q-o-q and 15% y-o-y showing good buyer sentiment. Hanoi recorded 7,400 units sold, nearly triple the previous quarter’s volume, though still 23% lower y-o-y. This surge was driven by strong sales in new supply from Vinhomes, Keppler Tower, and The Matrix One, reflecting strong demand for high-quality products in township developments or standalone projects within a 30-minute drive from the city centre.
For the second half of the year, Knight Frank forecast that 4,900 apartments will be launched for sale in Ho Chi Minh city while Hanoi is projected to receive over 10,000 units. Ho Chi Minh City's market is expected to welcome a diverse range of products, from affordable to ultra-luxury segments, with the average primary asking price holding at around US$3,800 per sq m. In contrast, Hanoi's asking prices are forecasted to rise by 5–6% q-o-q, potentially bringing the city's average to approximately US$3,400–3,500 per sq m.
“After municipal mergers, Ho Chi Minh city’s apartment market may require time to adapt to legal and planning updates, which are expected to delay project approvals. With limited supply, upcoming luxury projects planned for launch in H2 2025 are anticipated to drive a 5-7% increase in primary asking prices in the luxury segment, reaching approximately US$6,000 per sq m. Meanwhile, Hanoi continues to perform consistently, supported by a wave of new developments from reputable developers, especially international players.” added Son Hoang, Associate Director, Valuation and Advisory, Knight Frank Vietnam.
INDUSTRIAL
Vietnam’s Industrial Land Market Gains Great Momentum in H1 2025
Average asking prices for industrial land in tier-1 locations in the south increased to US$169.4 per sq m per lease term (up 4.4% y-o-y). Limited supply allowed current industrial parks to raise asking prices with the 85-hectare Prodezi Eco Long An Phase 1 Industrial Park launched in Q2 with asking prices at US$189 per sq m per lease term. In the Tier-1 city/provinces in the North, average asking prices rose to US$136 per sq m per lease term (up 5.4% y-o-y). This growth was driven by strong demand, which enabled both existing parks to raise their asking prices and new projects to enter the market at higher price points. For example, the newly launched 280-hectare Trang Due III Phase 1 Industrial Park in Hai Phong is quoting a premium rate of US$170 per sq m per lease term.
400ha of land was absorbed in H1 2025 (up 42% y-o-y) in northern industrial parks with occupancy now at 80%. This reflects strong manufacturing expansion and reaffirms the northern region as a key investment destination. Transactions were led by sub-developers building ready-built factories and warehouses (45%) and electronics manufacturers (31%). In contrast, the Southern market, facing limited land availability and rising rents, saw net absorption of just 32 hectares, mainly in Long An and Dong Nai, with occupancy rising to 90.5%.
By the end of 2025, approximately 500ha of new supply is expected in the South from the Cay Truong Industrial Park in Binh Duong Province, and around 300ha in the North from the Gia Loc and Kim Thanh II Industrial Parks in Hai Duong Province. Occupied industrial land in Tier-1 cities across both regions is projected to grow at an annual rate of 3–5%, while average asking prices are expected to increase steadily by 4–6% per year.
“The full extent of the US tariff will continue to play out, but the signals from the first half of 2025 for Vietnam’s industrial property segment show positive signals. On the ground, we are still seeing demand for manufacturers expanding and deals are getting signed supporting occupancy and take-up. Our view is that the remainder of the year will continue to see measured confidence in Vietnam as manufacturers work to understand what defines ‘transshipment’ and while the US works with other Asian nations on their tariffs.” remarked Alex Crane.
Note:
Tier-1 city/provinces in the North includes Hanoi, Hung Yen, Hai Phong, Bac Ninh and Hai Duong.
Tier-1 city/provinces in the South includes HCMC, Binh Duong, Dong Nai, Long An and Ba Ria – Vung Tau.
HOSPITALITY
Relaxed Visa Rules and New Direct Flights Propel Vietnam’s 5‑Star Hotel Revival in Hanoi & Ho Chi Minh city
In the first half of 2025 the average daily rate (ADR) in Ho Chi Minh city increased to US$152 per room per night, up 2.4% y-o-y, driven by over 22.1 million tourist arrivals (up 12% y-o-y) during the peak season of H1 2025. The Indigo Saigon The City by IHG, also contributed to the ADR increase, offering rates of over US$200 per night. The ADR for 5-star hotels in Hanoi increased by 2.6% y-o-y, to US$135 per room per night, supported by good performance from existing hotels amid a significant rise in tourist arrivals, which reached 15.5 million (up 11.8% y-o-y). In H1 2025, Hanoi’s new supply included Dusit Le Palais Tu Hoa in the Westlake area, which recorded an ADR of US$124 per room per night. Average occupancy rates rose in both Ho Chi Minh and Hanoi to 70% (up 4.6 ppts y-o-y) and 67% (up 2 ppts y-o-y) respectively.
By the end of 2025, Hanoi’s 5-star hotel market is expected to add approximately 500 rooms from three new hotels. In contrast, Ho Chi Minh City is not expected to see any new 5-star hotels until 2027, which is likely to maintain higher ADR’s and occupancy.
“Benefiting from visa relaxations under Resolutions No. 44/NQ-CP and 11/NQ-CP, along with an increase in direct flights from Europe, the Middle East, and India, as well as major events such as Reunification Day, “Get on Hanoi 2025”, tourism activity has seen a significant boost. This is clearly reflected in the strong growth of international tourist arrivals, up 40% y-o-y in Ho Chi Minh City and 22% in Hanoi. Building on this solid foundation, we believe the 5-star hotel segment will perform well through the end of 2025 and beyond,” said Son Hoang.