Hanoi office market yet to boom despite upward trajectory

Hanoi’s office market enjoyed a boost from an additional supply of 81,000 square meters during the first quarter of this year but it is yet to undergo a boom, according to a foreign-invested property services provider.


Hanoi office market yet to boom despite upward trajectory

Grade B projects and the west of Hanoi remained the largest suppliers in Q1/2019. (Illustrative photo: baodauthau.vn)


First Grade A supply in CBD for five years

Savills Vietnam stated in its Q1/2019 report for the performance of Hanoi’s office market that one new Grade A project and three additional Grade B ones added a combined 81,000 square meters to the total supply.

Grade B projects and the west of the city remained the largest suppliers. Whilst occupancy and demand remain high, the average rent is forecast to increase in the short term with numerous landlords raising prices.

The central business district (CBD) segment continued to report increasing rental prices, but the non-CBD posted stronger growth in rent. Hanoi recorded 6,339 new businesses, surging by 16.2 per cent per annum, with total capital of VND52.6 trillion (US$2.28 billion), up 0.2 per cent on year.

Notably, the CBD welcomed its first Grade A building in the past five years. Interest in Grade A projects is expected to increase in line with upward foreign direct investment and dynamic M&A activities.

There are currently no contiguous spaces in Grade A buildings in the west and CBD areas, with the exception of the newly-launched ThaiSquare building.

Existing buildings are aging and lack modern facilities, whilst future developments meet legal restrictions and expensive construction caused by scarcity of land.

Tenants planning to expand may need to consider flexible split-floor solutions or try relocating to other areas, Savills Vietnam said.

 

Boom in co-working spaces

Co-working spaces have grown in popularity as Regus, Up, Toong, Cogo, Tiktak, CEO Suite, Dreamplex, and WeWork all entered the market. As this model is quite new, growth is set to accelerate further.

Potential entrants include JustCo, Ucommune, and The Executive Center. In 2019, Regus plans to open a new center in Hanoi under the “Spaces” brand while Cogo will expand in FLC Twin Towers, Sun Plaza Ancora, and more.

From 2019 onwards, Rehoboth will open three centers in Hanoi and Toong will integrate into “Wink” hotels.

A new supply of approximately 392,000 square meters is expected to enter the market by 2020. Tenants are moving from the old CBD - Hoan Kiem district - to newer business areas such as Midtown and the west.

With advantages in infrastructure such as upcoming metro lines, connectivity with other business districts (CBD and the west), and the largest supply of quality office buildings, Midtown is becoming a “core business district”, said Bui Trung Kien, associate director for leasing from Savills Vietnam.

Demand drivers include improved infrastructure (metro lines), increasing commercial and residential developments, as well as large yet affordable spaces.

Office demand could increase in many districts such as Thanh Xuan, Hai Ba Trung, Long Bien, Ha Dong, and Tay Ho, as these districts see a mix of limited office supply and the large number of workers.

VOV

 
 

Other News

.
Two updated scenarios put forward for Vietnamese economy until year’s end
Two updated scenarios put forward for Vietnamese economy until year’s end
BUSINESSicon  15/07/2021 

The Central Institute for Economic Management (CIEM) has revised two scenarios for the Vietnamese economy by the end of the year, with the GDP rate forecast to expand by 5.9% and 6.2%, respectively.

Borrowing US$5 billion to invest in stocks: worries behind the record
Borrowing US$5 billion to invest in stocks: worries behind the record
FEATUREicon  15/07/2021 

The number of newly-opened securities accounts opened in the last 18 months is equal to the total number of the previous 20 years.

VN stock market hits record, big names rise
VN stock market hits record, big names rise
FEATUREicon  14/07/2021 

The Vietnamese stock market in the first half (H1) of 2021 broke many records.

Aviation sector eyes recovery in 2023-24
Aviation sector eyes recovery in 2023-24
BUSINESSicon  14/07/2021 

Vietnam's aviation market is hoped to recover in 2023-24, according to a Vietnam Airlines' representative.

Businesses ask banks to ease interest rates as promised
Businesses ask banks to ease interest rates as promised
FEATUREicon  15/07/2021 

Bank loan interest rates are becoming a heavy burden on businesses, which have been hit hard by Covid-19 for more than a year.

Exporters face slew of difficulties due to COVID
Exporters face slew of difficulties due to COVID
BUSINESSicon  14/07/2021 

Though exports remain strong, several sectors face difficulties due to the COVID-19 pandemic and require support from the Government if they are to sustain the growth, experts said.

Ministry proposes reduction in insurance deposits for travel firms
Ministry proposes reduction in insurance deposits for travel firms
BUSINESSicon  14/07/2021 

The Ministry of Culture, Sports and Tourism wants to reduce the value of insurance deposits by 80 per cent to help travel companies that are struggling because of COVID-19.

Mekong Delta: attractive destination for renewable energy development
Mekong Delta: attractive destination for renewable energy development
BUSINESSicon  14/07/2021 

Taking advantage of its natural conditions and investment attraction policies, the Cuu Long (Mekong) Delta has become a destination for investors in renewable energy projects.

Vaccine passport: certificate could save the tourism industry
Vaccine passport: certificate could save the tourism industry
FEATUREicon  14/07/2021 

The Covid-19 outbreaks have hit the tourism industry especially hard. Travel firms are looking forward to the new vaccine passport, which they believe could save the industry.

Banks agree to reduce lending interest rates from July
Banks agree to reduce lending interest rates from July
BUSINESSicon  14/07/2021 

Commercial banks have agreed to slash the lending interest rate in order to help businesses and people overcome the difficulties caused by the Covid-19 crisis.

Industrial real estate market hit hard by fourth Covid wave
Industrial real estate market hit hard by fourth Covid wave
FEATUREicon  14/07/2021 

The latest Covid-19 outbreak, which began in late April, has slowed down the industrial real estate market. There have been only small-scale projects and no large scale one announced.

Construction ministry gives opinion on transfer of part of multi-billion dollar super-project
Construction ministry gives opinion on transfer of part of multi-billion dollar super-project
FEATUREicon  14/07/2021 

The Hanoi Construction Department has sent a dispatch to the Ministry of Construction (MOC), asking for guidance on procedures that parties have to follow to transfer a part of the Ciputra urban area project.

Banks lending big to keep agriculture sector ticking
Banks lending big to keep agriculture sector ticking
BUSINESSicon  14/07/2021 

According to the State Bank of Vietnam’s department of credit for economic sectors, as of April credit injected into rural and agricultural development had reached VND2.3 quadrillion ($100 billion), or 24.6% of the banking sector’s total loans.

IFC helps boost green credit in Vietnam
IFC helps boost green credit in Vietnam
BUSINESSicon  14/07/2021 

The International Finance Corporation (IFC) has provided a 100 million USD long-term loan for the Orient Commercial Joint Stock Bank (OCB) to increase the private sector’s contributions to green and sustainable growth in Vietnam.

Hotels as 5-star quarantine sites: new way to make profit
Hotels as 5-star quarantine sites: new way to make profit
FEATUREicon  14/07/2021 

For over the past year, one of the largest 5-star hotels in Ha Long City, Quang Ninh Province, has been used as a quarantine site for visitors who enter Vietnam by air. 

VIETNAM BUSINESS NEWS JULY 14
VIETNAM BUSINESS NEWS JULY 14
BUSINESSicon  14/07/2021 

Proposal to establish cargo airline rejected

Businesses in HCM City, Long An suspend operations to prevent spread of COVID-19
Businesses in HCM City, Long An suspend operations to prevent spread of COVID-19
BUSINESSicon  13/07/2021 

Authorities in HCM City and Long An Province have suspended operations of a number of businesses so that epidemic prevention measures can be carried out.

Shares nosedive on panic sell-off
Shares nosedive on panic sell-off
BUSINESSicon  13/07/2021 

Vietnamese shares plunged on Monday as panic selling flooded the market, following surging COVID-19 cases, reinforcing fears of further economic pain from restrictions induced by the virus.

Vietnam is second-fastest growing stock market with multi-billion dollar records: report
Vietnam is second-fastest growing stock market with multi-billion dollar records: report
BUSINESSicon  13/07/2021 

The State Securities Commission (SSC) has reported that Vietnam was the second-fastest growing stock market in the first half of the year, despite the fourth Covid-19 outbreak.

Vietnam Airlines resumes several international routes as of mid-July
Vietnam Airlines resumes several international routes as of mid-July
BUSINESSicon  12/07/2021 

Vietnam Airlines announced on July 12 that it will reopen international routes from the country to a number of destinations in Asia, Europe, and Australia between July and October.

 
 
 
Leave your comment on an article

OR QUICK LOGIN