HCMC – The third quarter of this year saw office rental prices falling and vacancy rates surging in HCMC, according to a new report by real estate consultancy Knight Frank.
The report, released on October 3, said that the vacancy rate for office spaces in the city had increased by 18%. Grade-A office rents have dropped by 2.2%, while Grade-B rents have decreased by a slight 0.2% compared to the second quarter. Currently, around 73,000 square meters of Grade-A office space remains vacant, with an average asking rent of US$57.60 per square meter per month.
The decline in Grade-A office rents is partially attributed to the opening of new office buildings in the Thu Thiem Peninsula, which offer more competitive rates than central District 1. This has provided tenants with additional options, contributing to the rise in vacancy rates.
Knight Frank forecast that another Grade-A office building will become operational in the fourth quarter of this year, adding 50,000 square meters to the market. This is expected to push the vacancy rate over 20% by the end of the year. Grade-B office rents are also projected to decline by 6%, settling at around US$32 per square meter per month.
Alex Crane, managing director of Knight Frank Vietnam, said that the price drop was in line with expectations. He also noted that the total available office space now exceeds the levels seen in 2011. “The difference over the past 12 years is not just in the quality of the office buildings but also in the expanding needs of multinational corporations present in Vietnam, particularly in HCMC,” he said.
