Savills Vietnam has just released a report on the operation of offices for lease in the 2 largest cities in the country. In 2017, these two markets have the most impressive indexes in the region.
Office leasing market in HCM City is a bright spot attracting the attention of investors thanks to the operating capacity and high rents. Rental prices in Ho Chi Minh City far out of other cities in the region, approaching the $ 50 per sqm.
It predicts that market performance will remain high in 2018 and rents will tend to rise due to pressure from demand.
Ho Chi Minh City’s office leasing market recorded 1.7 million square meters of floor space, a relatively high figure but has maintained a shortage of supply in recent years. The vacancy rate is always at a minimum and it is difficult to find large office space in the central area. The office buildings are in full swing and the occupancy rate remains high at over 95% for all quarters in 2017.
The main clients in Ho Chi Minh City are finance, banking, insurance and real estate. In the general trend of the world and the region, companies in the field of technology and e-commerce are developing rapidly in Vietnam, employing a large workforce and working floor demand. This is also the sector that needs the most impressive office work in the last two years.
Meanwhile, the total supply of office space for rent in Hanoi reached VND1.6 million square meters, and in the center of the capital has not recorded any new projects since 2014. Therefore, it is difficult to find the large area in the center.
Occupancy rates in the whole market have increased steadily over the past two years and reached 94% in the fourth quarter of 2017. Regarding the central area, the capacity is currently 97% and is expected to increase in the near future when no specialized office project is operational in 2018.
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In Hanoi, rents of financial, banking, insurance and real estate clients accounted for 50%, followed by manufacturing by 14%. Manufacturing and consultancy are the sectors with the most impressive office demand in the last three years. According to the survey, the share of foreign tenants in buildings in the region has increased from 45% in 2014 to 56% in 2017.
Things to know when renting an office
The first is the location: Find an office conveniently located for business, branding and transactions. The ideal location is clean location, full light, guaranteed green trees, beautiful scenery, convenient street for traffic. Surrounding the area, dining and entertainment services are also very important. In addition, having a good location is advantageous for recruiting. Most of the employees want to have a place near their home not far from the center.
Second is the area rented: This is the area used, commonly known as “net area”. The area used does not include corridor areas, toilets, elevators and stairs. The average area is 5m2 for 1 working position, the most ideal is 8-12sqm / person. Some buildings with particularly good locations and brands often charge “Gross Area”, which means they can add up to 7% to 20% of their total area into the rental area.
Third is service fee: This cost depends on the “Grade” of the building, grade A from 5.5 to 6.5 sqm per month; Class B from $4 to 5/ sqm/month; The lower is the C class office or smaller. Of course, “Any money,” high-cost buildings with the purpose of keeping the building’s image always good to affirm and enhance the value of the building over time.
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