HCMC office market HCM City in 2017 marked the bold mark of the Class A office with the emergence of new supply, rents and occupancy rates increased significantly.
New Class A office space for 3 years
In 2017, the office market in Ho Chi Minh City. Four new projects were officially launched. As a result, total market supply increased by 6% to reach VND1.7 million/ sqm.
A special feature of the HCMC office market. HCM City in 2017 is the appearance of high-end office rental in the central area. “This is the first time in three years the market has had a new A-stock,” Savills reports.
According to CBRE, asking prices of Class A and B in 2017 are $ 37 / sqm / month and $ 20.6 / sqm/ month respectively. This price level has shown a clear distinction between the two types of office.
Class-A office rents increased slightly by 0.9% quarter-on-quarter while downsize by 0.5%. Class A recorded a year-on-year increase of 1.3% while Grade B was almost unchanged.
In terms of occupancy, Class A continued to show its mark at 94.2% – an increase of 2.2 percentage points over last year and 0.8 percentage point quarter-on-quarter.
Meanwhile, despite a 97% occupancy rate, Class B showed a decline (down 0.2 percentage point from a year ago and 0.3 percentage point from the previous quarter).
Large area demand is increasing
According to CBRE, demand in the city. Ho Chi Minh City is increasing with large areas of 700 – 1,000 sqmNLA (occupied area), accounting for 33% of the total requirements.
“Tenants came from manufacturing and service sectors, accounting for 19% of total CBRE demand, while F & B accounted for 10%. % of total rental requirements, while new requirements and office relocation accounted for 24% and 48% respectively, “CBRE said.
According to CBRE, in 2018 the market will have more new supply with better quality. Growth is expected to be slower than in 2017, as only one Class A project in the central Deutsches Haus, as well as Class B supply, will continue to expand into the outskirts of District 2. and District 10, typically as a project from the new urban area Dai Quang Minh and Viettel Complex phase 2.
“Growth in rents will slow as existing projects will continue to adjust rents to the momentum of market movement, paralleling the rising vacancy rate and falling rapidly when the market is still absorbing the new premises, “CBRE reports.
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