HCMC grade A office vacancy rate to rise to 29%

By Anh Ky June 25, 2023 | 03:27 am PT

HCMC’s central business district in October 2022. Photo by VnExpress/Quynh Tran

The vacancy rate at grade A office buildings in HCMC are likely to rise to 29% late this year from 4.2% now, real estate consultancy Knight Frank Vietnam has said.

It also expects average monthly rent to fall to US$53 per square meter from $57 when supply increases sharply in the Thu Thiem Peninsula in the third quarter and the central business district in the fourth quarter.

Nhung Vu, associate director of office services at another consultancy, Colliers Vietnam, said the new office buildings include The Hallmark, The Mett and The Nexus, and they would be 15-25% occupied as soon as they open.

Leo Nguyen, director of occupier strategy & solutions at Knight Frank Vietnam, predicted the new supply would drag down rents at existing buildings by some 20%.

A recent survey by Cushman & Wakefield of 18 grade A buildings found average rents had risen slightly since late last year.

Knight Frank Vietnam expected grade B office rents, currently $34.1, to decline to $28.5 later this year, and the vacancy rate to increase to 14% from 12.3%.

Most tenants at expensive office buildings are in the finance, banking and insurance (48%), pharmaceuticals (19%) and technology (5%) sectors.

More businesses are expected to move into them because of multinationals’ "China + 1" strategy to diversify supply chains.