Capital Place, a Grade A office building (left) in Hanoi. Office real estate market will receive more Grade A office building projects due to increasing demand. (Photo baodautu.vn) By the end of 2022, six new projects are expected. The only GradeA building will be Techcombank Tower on Quang Trung street. This projectfollows the opening of another international Grade A building, Capital Place.
“Tenants can pick from a variety of new high-quality Grade Aproperties entering soon, mostly in Hoan Kiem, Ba Dinh and Tay Ho districts.New properties will compete with existing buildings in terms of quality,services and pricing," said Hoang Nguyet Minh, Senior Director ofCommercial Leasing, Savills Hanoi.
"Hanoi’s office supply is lower than regional peers likeSingapore or Bangkok. However, the rents are lower, the quality is high, andthere is great potential for economic growth. These factors mean that foreigninvestors are still keen on developing projects in the city, creating a healthyoutlook for premium office supply.”
In the face of competition in rents, services, and buildingquality, the critical point is always how landlords and tenants plan to adaptand manage the transformation.
The experts outlined that, increasingly, buildings must cater todemands for green offices and the transition from traditional to hybrid oragile work.
According to Savills' latest market report, the office market willperform well this year, and information technology and finance, insurance, andreal estate (FIRE) tenants will lead demand.
According to Minh, the rent of Grade A offices will also depend onthe future supply. Increasingly, tenants are selecting offices in buildingswith green certificates catering to hybrid or agile working.
Green credentials drive leasing decisions and whether the spacecan cater to hybrid or agile work. Certified green buildings in Hanoi includehigh-end properties like TechnoPark Tower and Capital Place.
New properties like Techcombank Tower, Gelex, the office buildingat 36 Cat Linh, and Tien Bộ Plaza will have LEED Gold green certificates, whileLancaster Luminaire and Taisei Office Building Hanoi will have LEED greencertificates. These properties will add nearly 90,000 sq.m of green officespace.
Techcombank Tower will be the only new Grade A office building inthe central business district this year. The building is likely to performwell, given that it will compete with other office buildings in Hoan Kiem,which are more than 20 years old.
Between 2023 and 2025, high-quality developments, including Gelex,the office building in 36 Cat Linh, Tien Bo Plaza, Lancaster Luminaire andTaisei Office Building Hanoi, will enter the market.
Offices in green buildings have a competitive advantage comparedto conventional offices in prime locations. This is as these spaces are morethan just rooms filled with desks. Therefore, occupiers often feel moreproductive and are more engaged at work. The pandemic has accelerated theimplementation of hybrid and agile working.
According to a global survey by Savills, leading players like ICT,manufacturing, healthcare, and FIRE tenants are keen on adopting hybrid andagile working.
These models differ from co-working. Co-working is more abouthaving a shared space and services such as concierge, security, and cleaning.Despite its popularity, co-working has certain restraints and is more suitablefor start-ups, project-based companies, and short-term leases.
Matthew Powell, Director of Savills Hanoi, said: “The changes weare seeing will influence the market's future.”
Minh said: “Business should plan carefully when implementingchanges. They should consider the project's quality and the developer'sreputation. They should also consult with professional advisors. Thoroughplanning will reduce unnecessary costs during the leasing process, control risks,and bring greater satisfaction in the long term."
Savills 2022 Impacts report shows that workers still enjoydiversifying different workspaces. However, many companies want their employeesback at the office full-time.
According to the 2021 Savills Office FiT survey, 25 per cent ofworkers said they concentrate more, and 63% said collaboration is better at theoffice.
Businesses need to give employees flexibility while providing ahealthy and dynamic workplace. To meet these needs while ensuring continuity,companies should carefully consider which offices they select, the way they setthem up, and how they build a corporate culture within them./.
VNA
