HCMC office rents to decrease next year: property consultancy

The U.K. company forecast the grade A office space rent to decrease by around US$2 per square meter per month.

The average rate now in the central business district is $57.73, and the vacancy rate is 5%. The rate would further edge down to $55.5 by the end of 2024, and the vacancy rate would increase to 20%, Knight Frank said.

Grade B office rents are likely to fall even more steeply to $27 in 2023 from $33.68 now, it said. Logistics, financial services and technology companies are expect to rent lots of office space in the central business district next year.

According to Knight Frank, 2023 will be the first time since 2018 that office tenants may have the upper hand when negotiating with landlords with 333,387 square meters of grades A and B office space set to be added in the next two years, increasing supply by 23%.

The first new office buildings are expected to be ready in the second quarter, including two in the Thu Thiem urban area and one in District 1.

In the fourth quarter of this year average grade A rents increased by 2.6% year-on-year due to low supply, the company said.

HCMC only has 2.5 million square meters of office space, much lower than Bangkok, Jakarta or Manila which have six million square meters.

Colliers’ third quarter Asia-Pacific real estate report said the office market in Vietnam has recovered since the beginning of 2022.

In view of the low grade A office supply in the central business district due to a shortage of land, investors should consider developing new projects in Thu Duc City, it said.