Wednesday,  Sep 26, 2018,00:14 (GMT+7) 0 0
Office rent in HCMC mounts
Friday,  Apr 13, 2018,14:59 (GMT+7)

Office rent in HCMC mounts

Buildings in downtown HCMC are seen from District 2. The demand for office space in HCMC leaped while the availability of office buildings for lease was limited in quarter one - PHOTO: TL

HCMC – The demand for office space in HCMC leaped while the availability of office buildings for lease was limited in quarter one this year, resulting in a slight uptick in office rent, the website of Nguoi Lao Dong newspaper reports.

According to several market research companies, office space was in short supply in HCMC in the first quarter. In the last few months, no new office buildings, including grades A and B, have been put into operation, hence a slight increase in rent.

The average offered rent has continued to climb over the past four years and reached a record high in the first quarter of 2018.

According to property market consultant CBRE, office rent in the Grade A segment averaged out at US$39.71 per square meter, up 7.4% against last year, whereas Grade B also hit US$22.35, up 1.8% against 2017.

Statistics from Cushman & Wakefield, meanwhile, shows that Grade B currently accounts for 80% of the total floor area leased in this quarter. Some 60% of total transactions go to office buildings in District 1.

Apart from the new buildings that set high rent, existing towers may also to revise up rent due to the limited availability of buildings at prime locations. It is forecasted that the uptrend will likely continue in the short and medium terms due to the undersupply.

Alex Crane, general manager of Cushman & Wakefield Vietnam, said offered prices are still on the increase, partly because investors have reduced incentives for clients.

The robust demand for office space is attributed to strong economic growth and rising foreign direct investment.

Following Vietnam’s impressive achievements in 2017, the macroeconomy is predicted to remain stable this year with gross domestic product (GDP) growth predicted at between 6.5% and 6.8% this year, and inflation below 4%. Meanwhile, the Asian Development Bank (ADB) said in its latest report that Vietnam’s GDP growth is forecast to accelerate from 6.8% last year to 7.1% this year.

In the first two months of 2018, total foreign direct investment (FDI) approvals reached over US$3.3 billion. In addition, over 18,700 new businesses were established, fueling the demand for office space.

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