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Ha Noi: Office Market Waiting For Supply “Suitable Pocket Money”

Ha Noi office market

According to 2017, the office market in Hanoi will receive about 45,000 square meters of office space. Between 2018 and 2019, Grade A and B office markets expected to welcome more than 200,000 square meters of office space each year.

Vietnam Real Estate Market Report for the second quarter of 2017 recently announced by JLL showed positive signs in both the biggest cities in the country are Ha Noi and Ho Chi Minh City.

See more: Apartment for Sale in Ha Noi Capital

At the office rental segment, the Hanoi market recorded a slight increase in supply. Total supply of Grade A and Grade B office space reached more than 1,5 million square meters in quarter 2 / 2017, up 1,9% from the previous quarter, coming from completed Grade B office project in the quarter

The existing supply of A & B office space is concentrated in Hoan Kiem, Dong Da, Ba Dinh and Cau Giay Districts.

Grade A & B offices in the second quarter consume an area of over 34,000 square meters, most of which is attributed to Grade B. Movements, extensions and new office locations continue to be recorded in the Ha Noi market in this quarter.

Regarding office rents, according to JLL, rents in Grade A and Grade B increased slightly by 0.2% quarterly, without taking into account the impact of new supply. Investors of some Grade B projects are moving up the offer price to select large branded clients.

Ha Noi office market
Price for rent office Ha Noi

JLL also forecasts that in the year 2017, the office market in Hanoi will receive about 45.000 square meters of office space. Between 2018 and 2019, grade A and B office markets expected to welcome more than 200.000 square meters of office space each year.

The new supply at reasonable rental rates expected to promote demand for office space in the following quarters. The demand for business expansion of multinational companies forecasted to be the main source of supply for the office segment.

In Ho Chi Minh City, JLL said that in the second quarter, there was no new supply entering the market, total current supply by the end of quarter 2 reached about 1,8 million square meters.

Demand for grade A and B increased, leading to quarterly increases. Net absorption of Grade A and Grade B is 665 sqm and 10.303 sqm, respectively. Grade B occupancy rates have increased sharply thanks to good absorption in new buildings outside the center, occupying 96% of market B’s absorbed area.

Average grade A rents remained steady over the previous quarter, with grade B recording a 0,7% increase. Due to the high demand in the market, developers confidently offer higher rents, especially in new buildings. Overall, average rent increased by 0,3% quarter-on-quarter and 2,9% year on year.

Assessing the prospects for grade An office space, JLL forecasts to have two new projects launched in the second half of 2017, contributing 58.4000m2 to the market. In the next two-quarters, projects with higher standards, good market demand and limited supply will be the main reasons for the continued increase in average rental rates.

Ha Noi office market
Office space in Ha Noi

In with JLL’s opinion, CBRE Vietnam also said that the Ho Chi Minh City office market outbreaks with new opportunities for both investors and tenants, as the number of new high-quality supplies continues to land the market in the second half of 2017. Good rental rates have recorded with new supply to the market recently. Self-employed – outsourced projects are gradually becoming a prominent trend for 2017.

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Ha Noi: Office Market Waiting For Supply “Suitable Pocket Money”
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