HCMC, Hanoi office markets insulated from pandemic impacts

In HCMC, office rents range between $10-48 per square meter per month, up 11.5 percent from the second quarter, according to a report by Colliers International Vietnam.

Since there was no new supply recorded in the second quarter, occupancy in this office segment is now at 95 percent in the country’s largest city.

Rents of Grade A office space also rose 4.5 percent from the second quarter, but was down 0.2 percent year-on-year, the report said. Occupancy was a high 98 percent.

The report noted that the Covid-19 pandemic has pushed some companies to switch from Grade A to Grade B offices to lower costs. Some of the sectors that are making this shift are finance banking and fintech.

Colliers International Vietnam CEO David Jackson said that with Grade B office space offering high quality and good location in the city center at lower prices than Grade A, it will be the dominating rental segment in the near future.

In Hanoi, compared to other ASEAN countries, office rents in the third quarter was second only to Singapore with an occupancy at 94 percent, according to real estate consultancy Savills.

"This is a good sign as it shows great potential for recovery of the Hanoi office market after the Covid-19 outbreak is contained," said Le Tuan Binh, Savills’s head of commercial leasing.

Hanoi is expected to remain among the nation’s top five localities in attracting foreign direct investment in the near future and therefore demand for office space will remain high, especially among the e-commerce, finance, banking, logistics and information technology sectors, he added.