Office rents expected to rebound
10-08-2012
 A high-grade offi ce building on Le Duan Street in HCMC’s District 1 - Photo: Dinh Dung |
According to Savills Vietnam, office supply will slow down in the coming time while demand for grade A and B offices for lease will keep rising.
Truong An Duong, head of Research and Consultancy Department of Savills Vietnam, said the company bases its forecast on supply and demand balance in the future. Accordingly, annual demand is predicted on the leasing areas of each industry while supply is foreseen through the time for finishing office projects in the future.
In reality, the demand for offices remains high following economic growth and rising number of foreign-invested companies in Vietnam. Meanwhile, rents are under impacts of vacancy ratio and new demands.
Foreign firms currently account for around 60% of total office space of grade A and B in the city. Those in the financial sector rent the largest area of around 23%.
The market has tilted towards customers as office rents have declined steadily in recent years, helping them enjoy reasonable prices and preferential policies from investors.
Buildings in the central areas see faster occupation than those in outlying areas. This can be seen as many enterprises have moved from low to high-grade office buildings with the same rentals, Duong said.
For example, a director of a law firm has decided to leave his office on Ham Nghi Street to hire over 300 square meters of Vincom Center at the corner of Dong Khoi and Le Thanh Ton Street.
Meanwhile, Ernst & Young Company with Cushman & Wakefield Co. serving as a broker has moved its office from a building on Ton Duc Thang Street to occupy two stories of Bitexco Financial Tower. The tower is leased at US$30-55 per square meter a month.
According to Savills Vietnam, HCMC has around 1.2 million square meters of office space in HCMC while around 130,000 square meters will be added to the market from now to 2014.
