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CBRE said that throughout the year 2016, the price of office for rent in HCMC. HCMC has increased significantly due to limited supply, low absorption rates and low vacancy rates.
Specifically, the absorption rate of grade A office is 2,116 m2 NLA (real area of rent), class B is 13,092 m2 NLA. Grade A vacancy is 4.0%, Grade B 2.8%. Average rents are $ 38 for Grade A and $ 21 for Grade B.
In the fourth quarter of 2016, absorption rates of grades A and B were recorded at 906 and 285 m2, respectively. The low absorption rates of both grades A and B reflect short supply but are absorbed very quickly before the next wave of supply occurs in the near future.
Also in this quarter, the office market for rent. Ho Chi Minh City welcomes 2 completed projects: Mappletree Business Center (District 7) and Ha Do Building (Tan Binh District). In addition, two other long-running projects, SJC Tower and Tax Sale, have been kicked off, which is expected to provide approximately 83,000 sq m.
In 2017, CBRE forecasts total office supply to reach 1.2 million square meters of NLA. In particular, Grade A occupies 357.7 thousand sqm, Grade B occupies 896 thousand sqm.
Supply is expected to grow steadily with new entrants entering the market from both the CBD and the CBD; On average, from 2017 to 2019, the market will welcome about 40,000 square meters of NLA each year.
Average asking rents are expected to grow steadily with an average growth rate of 1.5%, especially in the CBD. Grade B rents are expected to become increasingly competitive as new supply arrivals from both Class A and Class B enter the market.
CBRE expects the vacancy rate to remain at current levels as the market gradually absorbs new supply from both Grade A and Grade B in the period from 2017 to 2020 from around the city. On average, annual absorption rates will reach 86.4% of total new supply that year.
In coming up in 2017, the main stimulus for rental activity comes from expanding tenants and moving to new buildings. Grade A tenants will continue to move to new buildings as their lease expires. Grade B tenants, in turn, will absorb the empty space occupied by Grade A tenants. In addition, tenants also tend to expand offices in the current rented building or when they move to a new building.
According to CBRE’s record, the largest demand for office space in HCMC. HCM still comes from Finance – Banking, Logistics and Information Technology.
As the nascent start-up market in Vietnam expands, the tenants will have more choice from common workspaces and service offices instead of traditional office.
CBRE expects older buildings to make use of commercial blocks that are no longer in operation and hard-to-accommodate office space for development into service offices or shared work spaces.
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