High-end office rentals in Ho Chi Minh City hit a peak of $67 per square meter annually over the past five years, marking a 2.2% increase from 2023.
In all categories—budget, mid-tier, and high-end—the mean rental price increased by 1.6%, reaching $36, as reported by JLL Vietnam, the real estate consulting firm.
According to data provided by market research firm Knight Frank, this upward trajectory persisted, with prime office rents increasing by 3% last year to reach $61.
The occupancy rates for new office buildings stood at 88-90%, according to the report.
A different real estate advisory firm, Savills, noted that the office market in Ho Chi Minh City has experienced a consistent rise in rental rates throughout the last ten years.
|
|
Ho Chi Minh City office buildings. Image courtesy of VnExpress/Quynh Tran |
In the previous year, for all grade levels combined, there was an increase of 2-3%, yet demand stayed robust, as evidenced by occupancy rates surpassing 89%.
Trang Le, CEO of JLL Vietnam, said recovery in demand from both domestic and international businesses has been a key driver, allowing premium office landlords to confidently hike prices.
She mentioned that last year, the vacancy rate fell to merely 6% for high-end properties and 12% throughout the market.
Data from JLL indicates that Japanese firms have been proactive in acquiring office spaces, representing 19% of over 75 businesses that entered into new leasing contracts in Ho Chi Minh City.
Vietnamese companies ranked second, followed closely by those from South Korea and America.
The information technology and communications sector led the demand for office space (accounting for 30% of the total absorbed area), followed by the finance and banking, retail and pharmaceutical industries.
Will Tran, who serves as the senior director of office leasing advisory at JLL Vietnam, noted that increasing rents have been spurred by the introduction of new premium developments featuring strict criteria along with 'green' certifications.
He pointed out that buildings constructed using "green" standards come with increased building expenses, resulting in elevated rental prices.
Lee stated that the upward trajectory is not expected to decelerate in the near future, considering the minimal anticipated rise in supply within the core region.
This year, Ho Chi Minh City is anticipated to offer approximately 71,000 square meters of leasable office space — a fairly small quantity that should get completely taken up in the near future.
Trang Bui, CEO at the real estate service company Cushman & Wakefield, stated that office rents in Ho Chi Minh City are expected to increase by approximately 5% this year, fueled by ongoing expansions in the office sector.
The two emerging urban zones, Thu Thiem and Phu My Hung, are poised to transform into key business centers.
By 2026, the market is anticipated to become stable, with growth possibly decelerating to an annual rate of 0.4-0.5%. She noted that demand for office spaces would persist due to major sectors like information technology, banking, manufacturing, insurance, and logistics.
0 Comments