Offices for lease in Thu Thiem new urban area in Ho Chi Minh City (Photo: VNA) HCM City (VNA) –The office market in Ho Chi Minh City has become vibrant recently with the opening of two office buildings in Thu Thiem new urban area which provides an additional85,000 sq.m of floor space.
The trend is predicted to continue until the end ofthis year as many buildings in the central area will be put into operation,insiders said.
According to CBRE Vietnam, areal estate service provider, the two office buildings, which are of Grade A, arelocated in a convenient location close to the central area andobtain green certificates. It signals that new office buildings with highstandards in favourable locations still attract the attention of businesses,especially multinational companies, CBRE said, adding that due to new supply, thetotal floor space of offices in the city has reached approximately 1.6 millionsq.m.
According to Duong Thuy Dung, head of Valuation, Research,and Consulting at CBRE Vietnam, most of the large leasing transactionsin thethird quarter took place at new buildings, which were finishedafter 2020. The total new leasing area of both Grade A and B in thethirdquarter was approximately 24,000 sq.m.
Experts said that the newsupply also means increased competition, driving the vacancy rate of Grade Aoffices from 7.5% to nearly 20%.
Besides, landlords are stillrelatively cautious with pricing decisions when the contract rental price mayhave to come with many incentives to attract or retain customers. Whileeconomic difficulties are forecast to last until the end of the first quarterof next year, this caution is necessary as the supply of Grade A office spacecontinues to increase in the coming years, they said.
Pham Ngoc Thien Thanh, DeputyDirector of CBRE Vietnam Research and Consulting Department said the city'soffice market is expected to soon become more vibrant in the context that themarket has been waiting for truly quality supply for a long time, especiallythe Grade A office segment.
In addition to pursuing high-quality standards relating to construction and operation, investors also paygreat attention to green criteria, ensuring quality of life for office workersbecause this is a prerequisite to attract and retain large tenants andmultinational corporations. It means that Grade A office buildings that havebeen in use for a long time should undergo renovation to ensure competitiveness,she said.
According to Trang Le, SeniorDirector of Research and Consulting Services at JLL Vietnam – a real estateservice firm, late 2023 and early 2024 continues to witness a big competition from a wave of newly-launched projects.
Despite being the localitythat attracts the top Grade A tenants in the country, HCM City's office marketis expected to return to a balance in the negotiation between landlords and tenants, shesaid./.
