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HCMC office rents return to pre-Covid levels

By Dy Tung   June 30, 2022 | 05:41 pm PT
HCMC office rents return to pre-Covid levels
Ho Chi Minh City's central business district, April 2022. Photo by VnExpress/Quynh Tran
A shortage of office space in HCMC is driving rents up to pre-Covid levels and vacancy rates down.

Grade A rents rose by 5.2 percent year-on-year in the second quarter to US$57.71 per square meter, or 2020 rates, according to property consultancy Knight Frank.

There has been no new supply this year, it said.

The vacancy rate edged down by 0.5 percentage points from the first quarter to 6.6 percent.

"Tenants still prefer the central business district, but they have to consider farther spots in case they need over 1,000 sq.m of space or have limited resources," Leo Nguyen, director of occupier strategy and solutions at Knight Frank, said.

Grade B rents were up 5.9 percent from a year earlier to $33.79 but fell 0.7 percent quarter-on-quarter as some landlords reduced them to attract customers.

The vacancy rate was 0.7 percentage points higher than in the previous quarter at 8.2 percent.

Many firms are considering moving to non-central business district (CBD) areas or letting their employees work remotely.

"Demand for grade B offices with an area of up to 4,000 sq.m mainly came in non-CBD areas," Nguyen said.

Tu Thi Hong An, director of commercial leasing at consultancy Savills Vietnam, said demand was driven by large enterprises in the finance, education and information technology sectors.

Supply in non-CBD areas rose by 22 percent year-on-year, with new projects mainly coming up in Districts 7 and Binh Thanh.

Grade A rents would continue to rise until 2023-2024 when new supply becomes available, and grade B rents would remain flat before falling in 2024, Knight Frank forecast.

 
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