Recovery of the office market in Ho Chi Minh City

HO CHI MINH CITY: The office market in Ho Chi Minh City saw its first positive signs in the first half of this year since being affected by the Covid-19 pandemic in the previous two years, according to the experts.

A report by CBRE indicated that for leasing, relocation accounted for more than 50% of total transactions, and the remaining transactions were for expansion, renewal and new leasing, at around 27%, 12% and 10%. respectively.

There were no more contractions like in 2020 and 2021, the company said.

In the first half, the company said, there was a new Class B office building, CMC Creative Space in District 7. The total net supply of rental office space in Ho Chi Minh City was around 1.5 million square meters.

Average Category A vacancy rate decreased 1.6 percentage points quarter-on-quarter and 2.1 percentage points year-on-year to 10.1%, mainly due to heavy absorption in District 7 .

Meanwhile, the average Class B vacancy rate remained at 9.7%, almost the same as last year.

Information technology (IT) and service industries accounted for more than 50% of total transactions. IT companies with growing businesses and investments continue to expand their tenancies and quickly finalize decisions within three to six months.

With the resumption of manufacturing after the pandemic, supply companies are returning to Vietnam and actively seeking office space, accounting for a growing percentage of new leases.

Cushman and Wakefield confirmed that despite many changes in office user behavior and habits over the past two years, the office market in Vietnam, including Ho Chi Minh City in the first half of 2022, showed recovery. and growth.

Demand forecasts continue to be positive, largely due to growth in office employment, lower adoption of flexible working practices and the enduring vital role of offices.

The future workplace will be an ecosystem offering many options to employees, both in terms of types of workspace, working hours and amenities around the office, according to the real estate services company.

The company’s second-quarter report found that office rental prices remained relatively stable, even in end-unit buildings in prime locations. Average rents for Categories A and B were $60 (RM266) per square meter per month and $34 (RM151) per square meter per month, up 1.9% year-on-year and 1.2 % YoY, respectively. — Viet Nam News/ANN

Jose C. Birney