Office space snapped up in Hanoi and Ho Chi Minh City

By Dam Tuan   May 20, 2016 | 03:53 am PT
A report released on May 19 shows that office rent and occupancy rates in both Ho Chi Minh City and Hanoi have risen thanks to growing demand and new office complexes.

Newly-opened central business districts (CBDs) in Vietnam's top two cities dragged the office rental index up by four percent in Ho Chi Minh City and 1.8 percent in Hanoi in the first three months compared to the same period last year.

According to the Property Price Index for Q1 published by Savills Vietnam, the leading global property services provider, the first quarter office index in Ho Chi Minh City was 83.6 points, climbing two points from the previous quarter and seven points on-year


Office transactions in Hanoi and HCMC surged in the first three months in contrast to residential property. Photo by taringa 

The southern hub enjoyed an increased occupancy rate of one percentage point from the previous quarter and five points on-year, leading the average occupancy rate to an eight-year high of 96 percent.

New high class and Grade B offices in District 1 and other CBDs enticed a high number of tennants, leading to a yearly hike in occupancy of three points and rent of four points. As a result, the CBD index rose one point on-quarter and six points on-year.

In Q1/2016, total office take-up was approximately 26,400 m2, decreasing 54 percent from the previous quarter but rising 176 percent on-year.

With growing demand, Grade A and B offices are expected to welcome more tennants in the coming years. Savills forecasts growth will be approximately 4 percent per annum over the next three years.

Savills Vietnam also announced the office index in Hanoi reached 57.8 points in Q1, rising 0.7 points from the previous quarter and 1.8 points on-year. Increased rents across all grades was the main reason for the upward index adjustment.

The CBD index improved 2.6 points from the last quarter of 2015 and 2.9 points on-year due to new office buildings in Ba Dinh District and around West Lake that helpd high class office space recover in terms of both rent and occupancy.

In 2016, Savills forecasts that CBDs will continue to perform well with average rents to grow seven percent. Areas on the outskirts of the city are expected to face a surplus of space due to the entry of new projects and existing vacancies in recently opened office buildings.

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