Grade A office vacancy rates 20% in Hanoi, HCMC in 2023

By Ngoc Diem   January 12, 2024 | 06:26 am PT
Grade A office vacancy rates 20% in Hanoi, HCMC in 2023
Part of District 1, Ho Chi Minh City. Photo by VnExpress/Quynh Tran
The vacancy rates in grade A office buildings in Hanoi and Ho Chi Minh City in 2023 were around 20% due to oversupply and the economic downturn.

They also rose in grade B buildings in the two cities.

Supply of grade A office buildings increased, but demand remained low because of the economic situation.

CBRE Vietnam said supply increased the most since 2019.

It increased by 132,000 square meters in Hanoi, mainly in the two urban districts of Ba Dinh and Dong Da and the western area, and by 170,000 sq.m in HCMC, mostly in District 1 and the Thu Thiem area.

This year Hanoi is expected to add nearly 128,000 sq.m through the Taisei Hanoi Office, 36 Cat Linh Tower and Heritage West Lake among other buildings.

HCMC is expected to add 130,000 sq.m.

But real estate consultancy Knight Frank Vietnam expected vacancy rates to remain in double-digits -- 20% for grade A office space and 14% for grade B -- for the next three years, dragging down rents.

Leo Nguyen, director of occupier strategy and solutions at Knight Frank Vietnam, said abundant supply in the coming years would cause tenants to move from grade B to grade A buildings.

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