HCM City (VNA) – Rents for Grade A offices in Ho Chi Minh City increased slightly in the second quarter of this year, reported Savills Vietnam, a leading real estate service company in the country.
The rental office supply in the southern economic hub in Q2 rose 2% quarter-on-quarter and 10% year-on-year to 2.8 million sq.m of Net Leasable Area (NLA) from 386 projects, according to Savills Vietnam’s report on the city’s real estate market in the first half of 2024.
The new supply of 52,512 sq.m of NLA from three new projects in non-central business district (CBD) continued to help ensure balanced and sustainable development of the market across the city.
Savills Vietnam said that in Q2, the average rent grew 2% quarter-on-quarter and 8% year-on-year to 815,000 VND (32 USD) per sq.m per month.
Non-CBD Grade A offices were the best performing segment in Q2 with the occupancy rate increasing 6 percentage points quarter-on-quarter to 84%, the highest among all grades.
Rents reached 1.1 million VND per sq.m per month, up 5% quarter-on-quarter. A total of 23,760 sq.m of NLA were leased, driven by Grade A projects that have opened since Q3 of 2023 and have good absorption such as The METT and The Hallmark in Thu Duc city, and The Nexus in District 1.
Similarly, Knight Frank, a commercial property adviser, reported that rents for Grade A offices in the city went up slightly, by about 0.5% compared to the previous quarter, reaching 58.4 USD per sq.m per month, due to higher demand for high-end offices in newly-built and green-certified buildings.
Leo Nguyen, Director of Occupier Strategy & Solutions at Knight Frank Vietnam, said that the office market in HCM City is developing constantly, and newly-opened Grade A buildings have an occupancy rate of over 70%. That gives tenants only few options when they want to move and also increase negotiation advantages for investors.
The firm forecast that this trend will continue affecting rental prices and inventory levels in the coming months.
It added new leasing transactions were recorded mainly in Grade A office buildings that opened last quarter. The occupancy rate in the Grade A segment is stable. On the other hand, some older buildings are losing tenants to newly-built Grade A buildings with green certificates./.
