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Foreign firms rent most premium office spaces: report

By Dat Nguyen   September 27, 2019 | 06:30 pm PT
Foreign firms rent most premium office spaces: report
Buildings in downtown Ho Chi Minh City. Photo by Shutterstock/Efired.
Foreign companies dominate premium office renting in Vietnam, where prices are among the highest in ASEAN, a new report says.

In the first half of the year, 80 percent of Grade A office space in Vietnam were leased to foreign companies, while the ratio of Grade B office was 58 percent, according to the report by real estate firm Savills.

Since 2017, foreign companies have accounted for 63 percent of Grade A and B space rented in the country, it said.

Increasing investment in Vietnam’s fast-growing economy has almost maxed out office space supply in its major cities. Occupancy rate in Ho Chi Minh City was 97 percent in H1 this year, and 90 percent in Hanoi.

HCMC’s supply of 1.9 million square meters in office space across all grades has risen by 3 percent from last year and is expected to rise by 20,000 square meters, or one percent, in the next two years.

Average office rent rose 6 percent year-on-year in H1 to $31 per square meter per month.

"Tenants who need a new office or want to expand the current area will not have many options due to limited supply in the near future. Companies who cannot afford the rising rents are likely to relocate to non-central areas," Savills said.

Although HCMC has some of the best premium office buildings in Asia, multinational companies still have other options in ASEAN to set up their headquarters due to the low supply and high prices in the city, the report noted.

In ASEAN, premium office prices in Ho Chi Minh City and Hanoi in H1 were second and third highest behind Singapore.

Grade A office rent in Ho Chi Minh City was $60 per square meter per month, while that of Hanoi was $40, compared to $35 in Indonesia’s Jakarta and the Philippines’s Manila, and $25 in Malaysia’s Kuala Lumpur.

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