Foreign companies grab new premium office space in HCMC

In April the National Australia Bank opened a new office in HCMC, leasing 8,500 square meters of space in The Hallmark building in Thu Duc City.

The premium office building opened in mid-2023 and has the Green Mark Gold sustainability certification from Singapore.

The Nexus, a premium office building built in late 2023, has several foreign tenants, including two of French pharmaceutical company Sanofi’s subsidiaries.

According to data from real estate consultancy Savills, 88% of the premium office space occupied in the first half has been leased by foreign firms.

Leo Nguyen, director of occupier strategy & solutions at another property consultancy, Knight Frank Vietnam, said the occupancy rates at many new grade A office buildings in the city topped 70% in the second quarter.

The e.town 6 project in Tan Binh District, expected to be completed in July, has already leased out 30% of its office space.

Technology and research and development companies accounted for 51% of the total leased area in the last quarter, followed by pharmaceutical firms with 23%.

Premium offices with green certification are seeing high occupancy rates though their average monthly rent rose 0.5% from the first quarter to US$58.4 per square meter in the second.

"Grade A office projects are seeing strong demand, especially from international companies seeking prime locations," Giang Huynh, head of research at Savills, said.

But older buildings lacking green certification are remaining vacant for longer, some for over a year and a half, according to Knight Frank.

In the first six months of the year HCMC’s economy expanded by 6.5% and nearly 25,250 new businesses were established, a 9.6% increase year-on-year.

Based on this, Savills said new businesses would drive demand for office space in the second half of the year.

The supply of office space is also expected to increase during the period, with 52,700 square meters provided by two new projects, e.town 6 and D'Saint Raffles in District 1.

In 2025-26 three more premium buildings will be completed in District 1, adding 125,000 sq.m of office space.

"With positive growth thanks to multinational businesses and abundant supply, the office market will grow to satisfy both developers and tenants in the next two years," Leo added.