HCMC’s office space market rebounds strongly

Office space for lease in Ho Chi Minh City in the first half of 2022 continued to make a recovery with a total net absorption area of about 21,000 sq.m, equivalent to 38 percent of 2021, although the new supply remained limited, according to real estate firm CBRE.
HCMC’s office space market rebounds strongly ảnh 1 Ilustrative image (Photo: SGGP)
In its report on the real estate market in HCMC in the second quarter of 2022, CBRE Vietnam said that the average vacancy rate of Grade A decreased by 1.6 percentage points quarter-on-quarter and 2.1 percentage points year-on-year to 10.1 percent, mainly thanks to the strong absorption of office space in District 7.

Meanwhile, the average vacancy rate of Grade B remained at 9.7 percent, almost equivalent to the figure reported in the same period last year.

The total office space for lease in HCMC in the first six months stood at 1.5 million sq.m.

According to CBRE Vietnam, the information technology and manufacturing industries account for nearly 50 percent of the total transaction areas.

Along with the recovery of the manufacturing industry after the Covid-19 pandemic, suppliers have also actively searched for office space with a significant increase in successful transaction rates in the new rental category.

Regarding leasing purposes, transactions related to relocation still accounted for the majority with over 50 percent of total transactions. The rest were transactions of expansion, renewal and new leases (27 percent, 12 percent and 10 percent respectively).

Notably, transactions related to narrowing space dropped off compared to 2020 and 2021.

According to experts from CBRE Vietnam, the first half also marked the return of demand for flexible offices with an occupancy rate of more than 90 percent.

CBRE Vietnam’s report said that HCMC is expected to welcome about 30,000 sq.m of new office space in the second half of 2022 from three Grade B buildings and two Grade A buildings. Along the banks of the Saigon River, many office buildings where construction was suspended due to the pandemic, have now been completed. The total space for lease in this area is 250,000 sq.m.

Rentals of both grades are not expected to see much adjustment until 2024 as most of the new supply in the second half of 2022 will come from non-CBD areas, CBRE Vietnam said.

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