The office-apartment segment (also known as Office-tel apartment) is emerging as a new investment channel, receiving much attention recently in the real estate market in Vietnam in general and Ho Chi Minh City.
Who should choose to invest in this type of apartment?
Office-tel is an apartment model designed for use with office functions. This product line is usually small (40 – 50sqm), the price is lower than the traditional apartment. The small area of office-tel attracts small businesses, especially start-ups, as well as foreign businessmen who wish to open a company in Vietnam with a need for a fixed-term stay here.
In fact, this trend affects the traditional source of office space for rent. Limitations of office-tel are limited space and have to share, optimize with workspace. These apartments are suitable for single clients, small families, small companies. When the area of the apartment is no longer sufficient to meet the demand for space, the apartment owner may still consider the sale or sublet.
Highlights of the office-tel model is the convenience, economy, suitable with the new development trend of the market, creating conditions for people to maximize productivity, reducing time and costs getting high efficiency in work.
Office-tel is oriented to develop in a uniform and professional manner, providing office facilities in accordance with standards such as entrance, reception hall, corporate name area, elevator system for the guests. Room, telecommunication system … This model ensures safety and professional security control system, security card and professional building management system.
Small and medium enterprises, start-up companies are one of the objects that should invest in office-tel. For the investor, the office-tel form is said to be more profitable than developing a traditional office for lease, helping to streamline cash flow faster. Therefore, many domestic developers develop office-tel in apartment projects such as Novaland (RiverGate, The Tresor, Lexington Residence, Orchard Garden), Sacomreal (Charmington La Pointe), Hung Thinh (Florita), Vingroup.
In Cushman & Wakefield’s study, he pointed out that with a total value of only 1.5 billion to 2 billion apartments, there are three suitable customers to select the Office -tel product line:
- Small and medium enterprises, start-up companies with less than 10 employees need to save time and costs.
- Customers have free money, want to invest for profit instead of saving. With a profit of about 8% – 10% per annum on the total value of the apartment, this is a really attractive investment channel.
- Foreign experts work in Vietnam for a long time because of the location of most of the projects concentrated in the CBD / CBD area, close to the office buildings and commercial centers. For travel, work.
Currently, about 40% of office-tel are companies that wish to open representative offices, customers buy to stay , account for 10-15% , the rest to invest. However, the biggest challenge for office-tel investors is the issue of the legal framework.
Investors should consider specifying the demand for this segment, secondary market trends (resale or lease) as well as commitment policies for rent / lease back from the owner. A clear legal framework will help define the customer as well as the opportunities for the investor, which will make the model more attractive to buyers.