The number of luxury apartments and offices for lease is likely to soar by around 674, with prices ranging from US$20-30 per sqm.

That was the prediction of general director of CB Richard Ellis (CBRE) Vietnam Marc Towsend - a view supported by Chesterton Consulting Co's representative in Vietnam.

Chesterton attributed the increasing demand to the recent the influx of Asian businessmen into the city.

A senior official at a large domestic asset company said increasing demand for apartments and offices has brought opportunities for Vietnamese asset companies because foreign invested firms could not supply the market's needs.

Although domestic companies have failed to capitalise on the need for apartments of a hundred square metres or more, they are handling deals for smaller apartments.

Lower fees for services fees over an acceptable period are these firms' strong points, he said.

Luxury two-bedroom apartments currently cost $1,100-$3,900 per month. Three-bedroom apartments now fetch $1,200-$4,300 per month.

Despite growing demand, Chesterton believes rental prices will not increase much further in the coming months as more than 400 new apartments are expected to become available by this April.

However, Towsend said it was still difficult for foreign executives to find suitable accommodation in the heart of the city because only 1 per cent of city centre apartments are currently vacant.

According to asset companies in Hanoi, 74,121sqm of "A-grade" apartment space is currently occupied, costing around $38 per square metre per month - far higher than Bangkok or Kuala Lumpur. However, 99.7 per cent of "B-grade" apartments have been taken, they say.

CBRE predicts that demand will increase over the next two to three years.

Hanoi and Ho Chi Minh City are carrying out a number of projects to meet this demand, such as the construction of the North Asia Tower, the Opera Business Centre, Pacific Place, VIT Tower, Viglacera, Kinh Do and The Manor, which are expected to be completed this year.