Despite the extended 4th Covid-19 epidemic and social distancing actions being thought-about an enormous problem for the workplace rental market. However, in Hanoi, the workplace rental market remained unaffected, and rental costs remained unchanged.
The 4th extended Covid-19 epidemic and social distancing actions are being thought-about as massive challenges for the workplace rental market. Hoang Nguyet Minh, Director of Commercial Leasing, Savills Hanoi shared that many companies have continued to increase lease contracts or postpone workplace relocation plans relying on the epidemic scenario. Notably, workplace rents in Hanoi are anticipated to face agency, and the market’s extra rental space will face a big decline within the final 6 months of 2021.
The Hanoi Real Estate Market Overview Report within the first half of 2021 recorded gross workplace rents at $21/m2/month, secure QoQ however up 6% YoY. Under the stress of the fourth Covid-19 wave, Ms. Hoang Nguyet Minh, Director of Commercial Leases, Savills Hanoi mentioned: “Responding to the current development of the epidemic, tenants find it more difficult. when making the decision to rent an office at this time. Site survey and interior construction also face many limitations. Most businesses have decided to continue to renew their lease or postpone the plan to move offices until the year after the epidemic is extinguished. Therefore, I think the last 6 months of the year will be the time when the market will see a slowdown in office activity and a decrease in the rate of additional hires.”
However, Ms. Minh commented: “Office rental prices will not be affected after the epidemic situation. Requests for rent reductions may come from some tenants during the period of social distancing due to the travel ban, unable to come to the office. In the long term, the current rental price in Hanoi market is reflecting the market value and the affordability of office tenants. Therefore, there will not be a tendency to reduce rental prices in the market to retain customers.”
Director of Commercial Leasing Savills Hanoi added, workplace rental value Grade A in Hanoi has a big disparity between areas corresponding to Hoan Kiem or the Western area. This distinction is even nearly double by way of rents per sq. meter. Therefore, when high-standard workplace buildings are put in the marketplace, the big provide and low rents within the West of Hanoi are nonetheless dragging the common hire in Hanoi at 33USD/m2/month . This determine is decrease than the common hire within the metropolis. Ho Chi Minh City, the place nearly all of Grade A workplaces are positioned in District 1.
Assessing the answer that tenants select to make use of versatile workplace companies to have the ability to adapt to adjustments in income, capital stress, and price management in the course of the epidemic season, Ms. Minh mentioned that giving up workplace Traditional rooms to modify to a versatile workplace mannequin don’t essentially assist optimize the price of renting house.
“Before making the decision to switch offices, businesses should note that traditional office leases today usually last from 3 to 5 years, with an average extension of 3 to 5 years. next 5 years. Besides, serviced office rent is often more expensive than traditional office rent, the cost savings when using this type of office is uncertain.” Mrs. Minh defined.
Sharing the identical opinion, Mr. Matthew Powell, Director of Savills Hanoi commented: “Rental prices will continue to depend on market supply. Savills found that in Hanoi, domestic and international businesses are tending to use high-quality office space with significant floor space. With many projects under construction, the new supply is likely to make the office sector much more competitive in the near future.”
According to him, within the context of Covid-19, the hire continues to be very secure, even growing by 7% year-on-year. The hire of Grade A workplace within the heart was maintained with the very best common gross hire of 38USD/m2/month. Since Cornerstone Building entered the market in 2014, no Grade A workplace buildings within the heart appeared till Thaiholdings Tower entered the market in 2019 with 24,500m2. Therefore, within the interval from 2014-2019, clients who need to develop their workplace within the central space at 1,000m2 or extra usually have to attend. Due to the truth that at the moment, there have been few buildings within the central space that might meet the realm necessities.
He analyzed, as quickly as Thaiholdings Tower was launched, the constructing was met with demand. For the shoppers who’ve been ready, hire is just one side, leading to rents within the heart at all times being held. In addition, when the International Center constructing at 17 Ngo Quyen was renovated, Savills introduced in main manufacturers corresponding to Dior and Louis Vuitton, serving to to raise the worth of the constructing. With the place and high quality improved markedly, the rental value is due to this fact increased than the frequent floor, contributing to pushing up the common value of the market.