HCMC’s office market in Q4.2019 has impressive metrics.
According to Mr. Troy Griffiths, Deputy Managing Director, Savills Vietnam “96% occupancy, with a gross rent increase of 3% YoY to US$32/m²/month make it one of the best performing and strongest office markets in the world at the moment”. New supply from Grade B with 2 new buildings and Grade C with 8 new buildings added over 101,000 m2 this quarter. At the end of 2019, total supply reached 2.1 million m2, increasing 8% QoQ and 13% YoY. With limited stock, Grade A had the best performance, rent increased 9% to US$61/m2/month and occupancy improved by 3ppts. In 2020, there is a fair new amount of supply coming on, with more than 270,000 m2, mostly from Grade B & Grade C buildings in non- CBD and by 2022, approximately 357,000 m2 will enter; 76% will launch in 2020.
Tenants have leasing options in Grade B and C buildings, with the average deal size from 600 to 1,000m2. Benefiting from the fast growing macro economy, there has been strong demand from local SMEs.
The strong performance is expected to continue, with decentralisation to affordable options. Many projects are defered due to administration delays.
Ms. Tu Thi Hong An, Associate Director, Head of Commercial Leasing, Savills Vietnam commented about the demand trend in 2020 “Tenants seeking new space or merely looking for business expansion, as well as companies who cannot afford the higher prices should consider many other options in the non- CBD, where there is more than 200,000m2 available. For example Opal Saigon Pearl in Binh Thanh District, The Orchard Parkview in Phu Nhuan District and Phu My Hung Tower in District 7. The rapid growth of SMEs and the Finance, Insurance, Real Estate sectors (F.I.R.E) and ICT will push decentralization.”