| Rental Comparison | ||||||||||||||||||
In Ho Chi Minh city, there are 5 high-end serviced apartment buildings in the heart of Saigon, that we consider to be on a par with Avalon in terms of quality of building, and standards of management. The following table shows the average rentals currently being achieved by these apartments: |
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Based on the above data, Avalon apartment's location right in the heart of HCMC, is expected to achieve a rental rate of around US$25 per sqm, or around USD 2,575 per month gross per 2-bedroom apartment. Given an average purchase price of US$225,000, this equates to an annual gross yield of 14% over the first 2 years (rental rates are typically fixed for 2 years). The costs and taxes is around 4-5%, so that an annual net yield is 10-11%. According to current Vietnamese Real Estate market trends, the annual yield should escalate by at least 10% per annum thereafter. Vacancy Rates IN HCMC Vacancy rates in these high-end serviced apartments in District 1 Ho Chi Minh city, are currently very low, with occupancies in the 96% to 100% range. Given the projected expansion of the Vietnamese economy, and the expected growth in foreign investment in HCMC, we expect this demand to grow strongly in the coming 1-3 years, ensuring good tenant demand for Avalon apartments. Source: CBRE VIETNAM |
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