Illustrative image (Photo: VNA) HCM City (VNA) – The office market in Ho Chi Minh City continued stable growth inthe first half of this year, with some increases in rental prices and areas,according to major property consultant firms.
Co-working spaces became more popular, meeting the diverse demand of customers.
Duong Thuy Dung, Senior Director and head of the Professional Services of propertyconsultancy CBRE Vietnam, said the vacancy rate of both Grade A and B was lowerthan 4 percent due to limited supply in the period.
As of the second quarter, the vacancy rate of Grade A stood at 2.6 percent,down 2 percentage points from the same period last year.
House owners of these segments upgraded material facilities to attract more buyerswhile adjusting rental prices, making them match the present market.
Troy Griffiths, Deputy General Director of Savills Vietnam, said the officemarket in the southern metropolis has grown stably over the past five yearswith increasing rental prices and areas, even when supply was expanding.
Of note, the rental price of Grade A offices continued to lead, up 2 percent inthe first quarter and 13 percent from the beginning of 2018, he said.
By the end of June 2019, total rental area exceeded 1.22 sq.km of 15 Grade Abuildings and 63 Grade B buildings.
Rental prices of the two grades rose due to the limited supply. The averageprice of Grade A in the second quarter was 46.7 USD/m2/month, up 0.9 percentagainst the previous quarter and 2.9 percent over the same period last year.Meanwhile, the monthly price of Grade B was 23.5 USD/m2, an increase of 0.3percent compared with the previous quarter and 4.7 percent year-on-year.
Dung said the trade war between the US and China prompted foreign firms to movetheir offices from China to Vietnam, resulting in a 29 percent hike in demandfor offices during the second quarter, up 21 percentage point year-on-year.
Nearly 40 percent of demand came from production and logistics firms and halfof the companies have offices in China.
The flexible space market rose sharply in HCM City in the first six months ofthis year. Between April and June, the market had an additional 4,000 sq.m fromUp Deutsches, The Hive-Huynh Khuong Ninh and Leo Palace in District 1, and CompassOffice-Landmark 81 and Kafnu-Saigon Pearl in Binh Thanh district.
According to Savills Vietnam, over the past two years, the co-working spacemodel has developed strongly in the city, with annual growth exceeding 90percent. The space covers 37,000 sq.m, mainly in the centre of the city.
WeWork, Up, Dreamplex, Regus, Compass and Kloud have made their names in themarket.
Property consultant firms said in the second half of 2019 until 2021, theoffice market will welcome an additional 14 offices covering more than 300,000sq.m, with half of them Grade A.
The market is forecast to experience increasing vacancy rates in both Grade Aand B during the next three years when a new wave of supplies comes. Rental pricesin Grade A will increase slightly in 2019 and 2020 with growth rate reaching 3percent and 0.6 percent, respectively.
Statistics show that more than 10,700 products were put up for sale, only 39.1percent of the amount offered in the first half. Meanwhile, 8,560 units weretransacted, or 46.8 percent of the same time last year.
Thecountry’s largest property market also had a high absorption rate of 79.9percent.
Accordingto Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokerage Association,HCM City’s property market is set for a promising July-December as local policiesare expected to boost both supply and transactions. Houses will sell well,however, at high prices.-VNA
VNA
