Ho Chi Minh City serviced apartments unrented

Occupancy rates for serviced small apartments for rent in HCMC stand at 90-95%, larger ones of 90-110 sqm have been left vacant.

Owner of apartment project said occupancy for small apartments had been at 90% since the fourth quarter last year.

But he added that while 100% of his one-bedroom apartments were occupied, most of his two- or three-bedroom apartments were vacant. He noted that his smaller apartments often supplied "better living space and more utilities" than larger ones.

If keep the big apartments, I will face the risk of making losses in the low season," he said. "So, the best thing to do is to increase the number of small apartments."

The owner of a serviced apartment project on Cuu Long Street, Tan Binh District, said apartment occupancy rates were 90-95%, while occupancy rates for small apartments were only 80%.

Savills’ latest serviced apartment report said that in HCMC, one- and two-bedroom apartments are popular due to their moderate rents. The report noted that the bigger serviced apartments are, the fewer tenants they lure.

Meanwhile 24% of two-bedroom apartments with an area of 80-100 square meters were rented.

Chairman of the office building and serviced apartment leasing company VNO Group, confirmed that two- and three-bedroom serviced apartments with an area of 80-110 square meters in HCMC were attracting far fewer tenants than one-bedroom apartments.

Budgets for renting serviced apartments are shrinking in the bad economy," he said. "So, it’s better to build fewer large apartments to optimize revenues and profits and avoid losses."

Hai also recommended that serviced apartment building owners separate large, serviced apartments into two small apartments.