Office buildings in Thu Thiem area, Ho Chi Minh City (Photo: VNA) In its report on HCM City office market in the third quarterof 2023, Knight Frank Vietnam predicted that in the fourth quarter, the office vacancyrate will increase to over 20% due to new supply in Thu Thiem area in Thu Duccity, which is a 12-year high.
Specifically, in Ho Chi Minh City, rents decreased 2.2% quarter-on-quarter for Grade A office and 0.2% for Grade B office, while Grade A office vacancy rateincreased to 18.2% and that in Grade B rose to 11.6%. Currently, the Grade Aoffice segment has a total vacant floor area of about 73,000 sq.m and an averageasking rent of 57.60 USD per sq.m per month.
Alex Crane, CEO of Knight Frank Vietnam, said that a decreasein office rental prices had already been forecast in 2022, so this is not a shock toinvestors. On the other hand, the new supply is welcomed by the market,because the city has not had any Grade A office building since 2017, hesaid, commenting that this period is too long for a large urban area like HCMCity.
According to Knight Frank Vietnam, the total office floor area forrent is currently higher than in 2011.
It noted that the trend of lowering the average rent ofGrade A offices is partly due to the impact of the opening of new officebuildings in Thu Thiem area, which have more attractive asking rents than thecentral area in District 1.
The report also showed that there will be another officebuilding coming into operation in the fourth quarter, providing an additional50,000 sq.m of floor space for the Grade A office market, pushing up thevacancy rate to more than 20% by the end of this year. During the same period,Grade B office rental prices are also expected to decrease by 6%, down to 32USD per sq.m per month, it said./.
VNA
