That is what Savills Vietnam gave when detailing the amount of transactions of business office properties in 2020 and the 1st quarter of 2021 as substantial as forty% when compared to the similar time period in 2019.
Savills Vietnam’s information in the Hanoi Market Overview Report in the 1st quarter of 2021 displays that the Hanoi business office current market is steady, the Grade A phase has the premier provide development yr-on-yr with 24%, and 33 USD/mtwo/thirty day period is the normal lease for Grade A phase in Hanoi current market.
In the context of the business office phase in Hanoi and Ho Chi Minh City. Ho Chi Minh City are the two shiny places in the authentic estate current market in standard, and the rental cost in Hanoi current market has remained steady at 33 USD/m2 even through the Covid-19 epidemic, Ms. Commercial leasing, Savills Hanoi reported: “The figure of 33 USD/m2 is the average of the entire Grade A market, including buildings with low occupancy rates (20-30%) and buildings with high occupancy rates (80-90%).
In fact, despite the impact of the Covid-19 epidemic, Savills also recorded the number of transactions of office buildings in 2020 and the first quarter of 2021 as high as 40% compared to the same period in 2019.
Especially from the fourth quarter of 2020 to the first quarter of 2021, the average rental area of the market has also increased significantly. Previously, the Hanoi market only recorded average rental areas at 300-500 m .2/deal.
However, recently, due to the new buildings with good quality and more reasonable rent, companies tend to gather all the offices, resulting in the number of office space transactions. over 1,000 m2 increase. This is one of the relatively significant improvements in the Hanoi office market.”
“The distribution of Grade A projects in Hanoi is spread across Hoan Kiem, Ba Dinh and the west of Hanoi.
The average rent of Grade A in the western area of Hanoi is at 20-25 USD/m2; In Ba Dinh and Hoan Kiem areas, the rent can reach 40 USD/m .2 (service fee included).
This is said to be the reason why the average rental price of the whole market in Hanoi is only 33 USD/m .2.
Meanwhile, in the city. In Ho Chi Minh City, the supply of Grade A office space is concentrated mainly in District 1 or right next to District 3. This concentration of supply makes the average rental price of Grade A offices reach 50 USD/m2.2.
In terms of office rental prices, Hanoi is still lower than Ho Chi Minh City. Ho Chi Minh City and other cities in the region, especially in the Grade A segment.
Grade A office rent in Hanoi and Ho Chi Minh City. Ho Chi Minh City are all dependent on the future supply of the market rather than the issue related to Covid-19.
For example, in the Hanoi market, from the fourth quarter of 2020 to the first quarter of 2021, Capital Place was recorded as a Grade A office building, providing up to 93,000 square meters of space.2 office floor, Thaiholdings Tower provides 23,000 m2 floor, and Leadvisors Tower with 18,000 m2 floor. These can be considered as very large supplies of the market.
Buildings that have just entered the market with large supply will often reduce rents in the first year to attract customers; Rent will increase gradually in the following years.
It can be said that this is the main reason why the rental price of Grade A office space in Hanoi market from the third quarter of 2020 to the first quarter of 2021 has remained almost stable, “said Minh.
Compared to the office market in other countries, the supply of the Hanoi office market is considered to be lower than that of Singapore or Bangkok, Thailand. Due to the fact that the rental price is lower than that of other countries in the region while the economic development potential is very good, foreign investors are focusing on developing the office market in Hanoi and Ho Chi Minh City.
Another notable point of the office market after the Covid-19 pandemic is the tendency to appear more of the co-working model.
Ms. Minh said that the co-working model and the traditional office model are not too competitive with each other. The co-working space model is promoted by the trend of young people preferring to work outside, with a flexible working environment.
However, Grade B and C offices are reaching the highest occupancy rates in the market, partly because businesses need a large office model, ranging from 1,000 to 2,000 square meters.2 floor.
Therefore, they often choose buildings with a reasonable rental budget that are more affordable so that they can have the cost of reinvesting in the interior, changing the working model to suit the company culture. Co-woking will only be suitable for start-ups or newcomers to the Vietnamese market, but for companies with long-term plans to operate, this will not be the right model.
Assessing the FDI capital into the office market in the coming time, Matthew Powell, Director of Savills Hanoi said: “We are seeing the expansion of local organizations and international businesses into the market. Vietnamese office school.
Vietnam is a target market for multinational companies, especially in the fields of Technology, Financial Services, and Life Insurance. These businesses are in need of offices, along with the emergence of new supplies, which will make the office segment much more competitive in the coming time. These are also factors that continue to push investors to develop the office market and look forward to future growth in rents.”
From a prospect viewpoint, Vietnam with its adaptable financial plan and successful Covid-19 containment has introduced quite a few benefits to the business office current market. No one particular has to function remotely for as well lengthy, and businesses are not below the monetary tension of discovering an excess business office in a less expensive spot, or acquiring to use a digital business office like in the US or the British isles. In Vietnam, the demand from customers for classic business office place carries on to expand together with higher issues about optimizing the use of classic places of work.”