Serviced apartments in HCM City’s District 3. — Photo nld.com.vn

HCM CITY — Instead of investing millions of dollars to build properties in HCM City’s inner districts, real estate developers are renting properties and furnishing apartments and putting them up as mid-priced serviced apartments for rent.

A survey by Người Lao Động (Labourers) newspaper found a number of such serviced apartments available in places such as Districts 1, 3, 4, and Phú Nhuận with monthly rents of US$300-500.

A 30sq.m apartment on Nguyễn Đình Chiểu Street in District 3 with a kitchen and washing machine, refrigerator and wifi costs $450.

For shorter terms, they cost up to VNĐ900,000 ($38) per day.

A person who turned a three-storey building he rented on Võ Văn Tần Street in District 3 said it was the third house he rented to lease out.

He pays VNĐ60 million a month for it, and invested VNĐ400 million to renovate and buy furniture before leasing it out.

With its six bedrooms, it is expected to fetch VNĐ110 million per month.

Trần Huyền Nga, owner of a house on Nguyễn Đình Chiểu Street in the same district, said she has refused to rent a new house she bought for VNĐ18 billion (nearly $1 million) to a lessee for VNĐ45 million. 

Instead, she plans to turn it into a serviced apartment and get more than VNĐ45 million.

Nguyễn Hồng Hải, CEO of Pax Land Real Estate Co. Ltd., said mid-priced serviced apartments have mushroomed in the last two years with average monthly rents of around $500.

These are targeted at relatively wealthy tenants who have to work in these areas for short periods, he said.

Recently, they have also been seen in suburban districts like Tân Bình, Bình Tân and Gò Vấp, he said.

“In the past few years, serviced apartments have been recognised as a safe and profitable channel for investment.”

Nguyễn Hoàng, head of R&D at DKRA Việt Nam, said mid-priced serviced apartments are preferred by young tenants. While expatriates working for multinational groups usually prefer regular apartments in inner districts, the young tenants prefer comfortable mid-range serviced apartments which offer them privacy, instead of apartment buildings and boarding houses.

Most of them are in five- to seven-storey complexes built on smallish plots of land in inner districts. A complex could have seven to 30 units measuring 20-40sq.m and costing $350-$380 per month.

In suburban districts such as Bình Thạnh and Gò Vấp, they could cost VNĐ4-6 million for 20-40sq.m units.

Hoàng said these are targeted at medium-income civil servants and workers who spend long hours at work. — VNS.