Buildings near city center in HCMC have greater edge
17-12-2012
Market research firms early this year forecast the city would have an additional supply of grade-A offices in the heart of the city of 77,000 square meters this year. However, the total area of office space launched onto the market so far this year is some 21,000 square meters.
Only the President Place at the corner of Nguyen Du and Nam Ky Khoi Nghia streets and the Empress building can enter the market this year. Meanwhile, it is impossible for a number of buildings in the city center like the Saigon One at the corner of Ham Nghi and Ton Duc Thang streets to be complete within this year.
According to real estate service provider Cushman &Wakefield, as the future supply declines while demand has been rising over the past time, office rent has stabilized after three consecutive years of decline.
The offered price of grade-A office space averages out at some VND642,000, or US$30.5, a square meter. And the average rate of grade-B offices is around VND362,000, or US$17, a square meter.
CB Richard Ellis Vietnam (CBRE) said downtown grade-A buildings such as Kumho Asiana Plaza, Metropolitan, Sun Wah Tower, Diamond Plaza, Saigon Center, Saigon Tower and Centec have maintained a high occupancy rate of roughly 95% in the last four quarters.
Similarly, new buildings like Vincom Center have seen a considerable occupancy rate, rising from 51% at the end of last year to 75% at present. Also, Bitexco Financial Tower has posted occupancy of nearly 68%.
Greg Ohan, director of office services of CBRE, said tenants’ tight spending and prudence in the search for new offices were what had defined the market this year.
The slower-than-expected supply of new office space has created favorable business conditions for grade-B office buildings near the city’s center. There is a high possibility that the phenomenon will continue into next year.
This is evident in high occupancy rates of several new grade-B buildings chosen by banks, law firms, multinational companies and pharmaceutical enterprises.
For instance, the Maritime Bank building on Nguyen Cong Tru Street has leased out 87% of its total area. And the newly-completed An Phu Plaza with nearly 8,800 square meters of office space and 54 serviced apartments has found a customer willing to occupy 30% of the total area.
The office leasing market in HCMC now has around 1.9 million square meters of office space available. Grade-A offices account for about 305,000 square meters and grade-B areas make up approximately 802,000 square meters, with the remainder belonging to the grade-C segment.
