Office for lease in Ho Chi Minh City increased rapidly
The recently released summary report of the retail, office and housing market in Ho Chi Minh City in the first quarter of 2022 by Savills shows that the office market for rent in Ho Chi Minh City is gradually improving, the supply of stable prices and rapidly increasing consumption demand.
According to a survey by Savills, the office supply in the first quarter was approximately 2.5 million m2, up 0.4% qoq and 3% the same period last year. Non-CBD supply increased by 1% qoq.
The situation of supply and consumption of offices for lease in Ho Chi Minh City over the years. Photo Savills
Regarding the rent, the survey announced that the average rental price is 716,000 VND/m2/month, this price is stable compared to the previous quarter, only Grade A office group increased slightly by 1%, at 1.4 million VND/month. m2/month. Although the price is stable, the occupancy rate of Grade A and B offices decreased by -1 point compared to the previous quarter, to 93% and 87% respectively. This decline is attributed to companies moving to lower-class buildings or reducing office size.
In contrast, Grade C office space traded quite actively in the first quarter of 2022, with occupancy increasing by 1 percentage point compared to the previous quarter to 91%. This is supported by the recovery from small and medium businesses after being impacted by the pandemic.
The prosperity of the office rental market in the first quarter came from consumption. Accordingly, the consumption volume reached 16,500 m2, more than the consumption of 1,500 m2 in Q4/2021. This increase can partly be attributed to the rapid economic recovery of Ho Chi Minh City after the pandemic. According to an earlier survey by Savills, the average area of a transaction in the first quarter of 2022 was about 250 square meters.
Ms. Tu Thi Hong An, director of commercial leasing department at Savills, analyzed that in the trend of office leasing after the pandemic, the combined office market has become more and more popular because of cost optimization. The information technology industry is the most active tenant group, looking for space in all three office grades.
Information and communication technology enterprises accounted for 54% of the total new consumption area, followed by distribution group enterprises with 17% and finance, banking and insurance enterprises with 14%.
This office market report also states that the office market for lease until the end of this year and into 2025 will continue to be active. Currently, there are a total of 17 new projects with 526,000 m2 of floor space expected to be put into operation. In the next 9 months to 2022, there will be two Grade B projects and three Grade C projects adding supply to about 76,000m2 of construction area, equivalent to 60,000m2 of usable area for the office market. Positive demand coupled with economic recovery is expected to boost office market activity in 2022.
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