The report on the real estate market of HCMC in the third quarter has just announced that reveals factors that help the office market in 2017 impressively.
Office rents are at “peak”
Accordingly, CBRE’s report shows that in the office market in Q3/ 2017, HCMC welcomed a new Grade A office building, Saigon Center 2, which added 32,000 sqm of NLA to the market. The building occupies a vacancy rate of 25%, a very positive index based on the pre-lease of the developer. There is no new supply from Grade B was recorded in the quarter.
Market status continued to stabilize in the third quarter of 2017, the strong absorption rate was recorded from the new entrants in the second quarter to 2017. The rents for Grade A offices was $ 36.73, rising 1.1% from the previous quarter. Although Grade A rents declined 5.0% year-on-year, overall market prices continued to trend upward. Grade B office rents were $ 20.71, a slight decrease of 1.4% from the previous quarter, but up 3.9% over the same period last year.
CBRE forecasts that the office market will end in 2017 with an impressive market entry of E-town Central in Q4/ 2017 and Deutsches Haus in Q1 / 2018. “In the future, large, high-quality floor plans are being planned and built, so the market’s momentum will continue to be maintained with larger rents. Asking rents are at the top and will continue to grow steadily along with the reduction of vacancy rates, “CBRE said.
The common price of retail increases sharply
With the multi-dimensional developments of apartment sales, the retail market in Ho Chi Minh City in the third quarter of 2017 doesn’t record new supply when maintaining at 845,765 sqm of floor space used for 52 projects, the highest level in Vietnam ever.
According to CBRE, although the supply has not increased, the market is still active with the entry of new brands and the expansion of existing brands. For example, in the central area, Vincom Center Dong Khoi has welcomed the first international fashion brand H & M to enter the Vietnamese market. More than 3.000sqm of floor space on the first floor and mezzanine floor has been exploited by this brand. A number of well-known brands also occupy significant areas on the higher floors.
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CBRE said that CBD rents increased by 4.8% quarter-on-quarter and non-CBD rents by 1.5% quarter-on-quarter. In the CBD, Vincom Center Dong Khoi has been upgrading its rental rates by 10-15% compared to the previous quarter, mainly on the ground floor and the first floor. Other retail formats in the CBD remain unchanged.
In the non-CBD area, most of the ground floor area of Thuan Kieu Plaza has been leased, even though it was officially opened in the fourth quarter of 2017.
And with future supply figures, CBRE forecasts that the HCMC real estate market will open over 500,000 sqm of new floor space by 2019. However, up until now, all of these projects have announced details of the launch, operation, design ideas, the structure of the goods,… so the market situation of this product is still waiting for the end of the fourth quarter 2017.
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