An office in HCM City. The city’s office market witnessed positive signs in the first half. (Photo: tphcm.chinhphu.vn) A report from CBRE said that for leasing, relocation accounted for more than 50%of total transactions, and the remaining transactions were for expansion,renewal and new letting, at about 27%, 12% and 10%, respectively.
There were no more contractions as there were in 2020 and 2021, the companysaid.
In the first half, the company said, there was one new Grade B office building,CMC Creative Space in District 7. The total net leasable office supply in HCMCwas roughly 1.5 million sq.m.
The average vacancy rate of Grade A decreased by 1.6 percentage pointquarter-on-quarter and 2.1 percentage point year-on-year to 10.1%, mainly dueto major absorption in District 7. Meanwhile, the average vacancy rate of GradeB remained at 9.7%, almost the same as last year.
Information technology (IT) and service industries accounted for more than 50%of total transacted areas. IT firms with growing business and investmentcontinue to expand their leasing and quickly finalize their decisions withinthree to six months.
With the recovery of manufacturing after the pandemic, sourcing companies arecoming back to Vietnam and actively seeking office space, making up a risingpercentage of new leases. All these brands are from the US, including outdoorand sports equipment, CBRE said.
Cushman and Wakefield confirmed that despite many changes in behaviour andhabits of office users in the past two years, Vietnam’s office market includingHCM City in the first half of 2022 showed recovery and growth.
Forecasts for demand continue to look positive largely due to growth in office-basedemployment, weaker adoption of flexible working practices, and the enduringvital role of offices. The future workplace will be an ecosystem that offersmany options for employees both in terms of workspace types, working time, andamenities around the office, according to the real estate service firm.
The second quarter report from the company saw office rental price remainrelatively stable, even at final units in prime location buildings. Grade A andGrade B average rents were 59.9 USD per sq.m per month and 34 USD per sq.m permonth, up 1.9% year-on-year and 1.2% year-on-year, respectively.
Trang Bui, general manager of Cushman and Wakefield, commented: “Demand forGrade A and B office rose due to the growing number of newly registeredbusinesses and expansion needs from foreign investors. Most companies expect aquality space equipped with expansive view of the city centre, one that canenhance the brand, attract clients and talents alike. However, the past fiveyears has seen no new supply of Grade A office space, and the number ofprojects to be launched in the next two years is scarce: The Hallmark [handoverexpected at end of this year), The Sun Tower [handover expected in 2023]. Thesupply shortage situation is also in mid-range segment as there are only a fewbuildings completed and ready to be leased this quarter: CMC Creative Space[District 7], Pearl 5 [District 3].”
The report from CBRE said that HCM City expected to welcome nearly 30,000 sq.mof net leasable area (NLA) in the second half of 2022 from three Grade Bbuildings and two Grade A building. Along the Sai Gon River, previously delayedbuildings due to COVID had resumed construction, and a well-planned andmagnificent skyline for this area was shaping up. The total supply of this areawould be 250,000 sq.m.
Due to the fact that most of the new supplies of the latter half of 2022 are innon-CBD areas, rent of both grades are forecast to stabilise until 2024,according to the report. The vacancy rate of Grade A after a period of recoverysince the second quarter of 2021 is expected to rise to more than 25% in 2024when a new wave of Grade A is launched./.
VNA
