Large volumes on way in Hanoi's office market

From 2019 onwards, tenants in Hanoi’s office market will have even more options to consider, given the increasing volume of office supply to be introduced in both Grade A and B, according to CBRE’s quarterly report released on April 10.

 Large volumes on way in Hanoi's office market

Approximately 138,000 sq m is expected to come on stream in Hanoi throughout 2019, 62 per cent of which is in the city’s west, which continues to strengthen its position as the largest office supply hub.

Locations in the midtown and west of the city will continue to appear on the prioritized option lists of IT firms and insurance or bank branches. Meanwhile, MNCs, embassies, and financial sector companies will have new options in the CBD for expansion or relocation.

In terms of demand, on the back of strong economic fundamentals, the financial and IT / Tech sectors remain in good shape with stable demand drivers. CBRE forecast that flexible space providers will continue to be a major source of leasing demand in 2019, given the increasing need for improving space efficiency among corporate clients.

Hanoi’s office market still saw relatively strong demand in the first quarter, primarily from local IT / Tech and flexible office providers as well as foreign insurance companies, with net absorption of 21,600 sq m, up 9 per cent year-on-year.

One Grade A office entered the market in the first quarter in Hanoi: Thaiholdings Tower with 24,545 sq m NLA, increasing the Grade A stock in the CBD by 10 per cent. This is the newest Grade A supply after three years without new supply and the newest office supply in the CBD-submarket.

As at the end of the first quarter of 2019, total office space in Hanoi had reached approximately 1.3 million sq m, of which Grade A accounts for only one-third.

Vacancy rates in Grade A went up by 5.0 percentage points (ppts) compared to the previous quarter due to new supply, staying at 9.4 per cent, while that of Grade B went down 2.6 ppts quarter-on-quarter, reaching 9.6 per cent, the lowest level for the last three years.

 

Ho Chi Minh City’s office market, meanwhile, only welcomed two new Grade B buildings with a total NLA of 19,800 sq m: the Thaco Building in District 2 and OneHub Saigon 1 in District 9.

Due to healthy performance in the traditional office market and limited vacancies, the head lease / sublease business has been growing in recent years, including Pax Sky, Dragon Fly, Todd’s Realty, and GIC Office. These operators usually lease the entire stand-alone building (usually Grade C or basic standard office) from an independent landlord and sublease to small tenants.

Large volumes on way in Hanoi's office market

Besides flexible workspace, insurance companies will count among the anchored tenants in the office market over the next three years.

According to figures from Swiss Re Institute Sigma, Vietnam is one of five countries with a low insurance penetration rate, but its insurance premium growth rate is even higher than developed countries, indicating plenty of opportunities for growth and that the country’s insurance market will likely continue to develop further in the future.

From 2019 to the end of 2021, the Ho Chi Minh City office market is expected to welcome 16 new office buildings with more than 400,000 sq m NLA. The market is expected to have higher vacancy rates and slower rental growth in both Grade A and Grade B, while rents in Grade A will remain high.

Rental growth in Grade A is expected to reach 4 per cent this year and vacancies will fall to 4 per cent due to new Grade A supply only being launched at the end of the year or the beginning of 2020. Grade B asking rents are expected to decrease slightly, by 1.5 per cent, and vacancies are forecast to increase 6.9 per cent due to a large Grade B supply coming on stream this year.

VN Economic Times

 
 

Other News

.
Coronavirus triggers boom in private jet inquiries
Coronavirus triggers boom in private jet inquiries
BUSINESSicon  18/02/2020 

Private jet firms have seen a huge rise in people hoping to hire planes but they can't meet demand.

COVID-19 highlights need for economic restructuring
COVID-19 highlights need for economic restructuring
BUSINESSicon  18/02/2020 

The respiratory epidemic caused by the novel coronavirus (COVID-19) has highlighted an urgent need for Vietnam to boost its economic restructuring and diversify its markets.

Vietnam’s logistics wins in US-China trade war
Vietnam’s logistics wins in US-China trade war
BUSINESSicon  18/02/2020 

Falling one place to 11th in the global index of emerging logistics markets, Viet Nam was still seen as a clear winner in the US-China trade war.

BUSINESS NEWS HEADLINES FEB.18
BUSINESS NEWS HEADLINES FEB.18
BUSINESSicon  18/02/2020 

Vietnam’s tourism sector counts cost of coronavirus

76 percent of German companies concerned about conoravirus impacts
76 percent of German companies concerned about conoravirus impacts
BUSINESSicon  18/02/2020 

Around 76 percent of German companies confirmed that the coronavirus epidemic affected their activities in Vietnam, according to a flash survey conducted by GIZ/AHK Vietnam.

Education draws foreign investment
Education draws foreign investment
BUSINESSicon  18/02/2020 

As of 2019, Vietnam counted five foreign invested universities, 68 private schools and 170 public ones.

Covid-19 crisis challenges banks
Covid-19 crisis challenges banks
BUSINESSicon  18/02/2020 

Some commercial banks have announced lower lending interest rates to help their clients overcome the difficulties caused by coronavirus (Covid-19) crisis.

Vietnam’s economy in ‘coronavirus whirlwind’
Vietnam’s economy in ‘coronavirus whirlwind’
BUSINESSicon  18/02/2020 

The Ministry of Planning and Investment (MPI) has predicted that the GDP would grow by 5.96 percent, a 7-year low.

Vietnam’s aviation sector loses $435 million amid Covid-19 epidemic
Vietnam’s aviation sector loses $435 million amid Covid-19 epidemic
BUSINESSicon  18/02/2020 

The initial loss caused by the suspension of flights to and from China for Vietnam’s airlines could be up to VND10 trillion.

2019-nCoV impacts on economies of Vietnam and China
2019-nCoV impacts on economies of Vietnam and China
BUSINESSicon  17/02/2020 

The service sectors of China as well as of Vietnam—including transport, accommodation, tourism, retail, hospitality and entertainment—will be hardest hit by the 2019-nCoV outbreak.

Vietnam's aviation industry expands market to maintain growth
Vietnam's aviation industry expands market to maintain growth
BUSINESSicon  18/02/2020 

The novel coronavirus epidemic has affected the socio-economic development of Vietnam, including the transport sector.

Property developers race towards digital technology
Property developers race towards digital technology
BUSINESSicon  17/02/2020 

Amid the fourth industrial revolution (Industry 4.0) many property developers in Vietnam are seeking to adopt digital technology both for enterprise management and in their projects.

Japan's economy shrinks at fastest rate since 2014
Japan's economy shrinks at fastest rate since 2014
BUSINESSicon  17/02/2020 

The world's third largest economy was hit by a sales tax rise, a destructive typhoon and weak global demand.

VN firms seek new raw material sources
VN firms seek new raw material sources
BUSINESSicon  17/02/2020 

Vietnamese companies, many of whom are facing a shortage of feedstock and raw materials as a result of the new coronavirus (COVID-19) outbreak in China, have started looking at alternative sources.

Coronavirus causes transport companies losses
Coronavirus causes transport companies losses
BUSINESSicon  17/02/2020 

Transport companies have been hit hard by the novel coronavirus (COVID-19).

Vietnam needs to find new rice markets to replace China: experts
Vietnam needs to find new rice markets to replace China: experts
BUSINESSicon  17/02/2020 

Since the novel coronavirus (Covid-2019) epidemic will surely affect exports to China, diversifying markets is an urgent requirement for Vietnamese rice exporters, experts have said.

Citibank and INGbank to provide credit to Nhon Trach power projects
Citibank and INGbank to provide credit to Nhon Trach power projects
BUSINESSicon  17/02/2020 

Citibank and INGbank will be in charge of arranging capital for the Nhon Trach 3 and 4 thermal power plants, according to a recent agreement signed between PetroVietnam Power Corporation (PV Power) and the two foreign banks.

Trading remains quiet amid risk concerns
Trading remains quiet amid risk concerns
BUSINESSicon  17/02/2020 

Brokerage firms and market experts remain pessimistic about market trading this week as investors run out of supportive information while international stocks continue to be weighed down by the novel coronavirus (COVID-19).

New document released to regulate use of non-residential real estate
New document released to regulate use of non-residential real estate
BUSINESSicon  17/02/2020 

The Ministry of Natural Resources and Environment (MoNRE) has sent a document to local departments to regulate the use and certification of non-residential real estate projects.

EVFTA brings chances and challenges to local agricultural production
EVFTA brings chances and challenges to local agricultural production
BUSINESSicon  17/02/2020 

The new trade agreement between Viet Nam and the European Union opens many doors for agriculture, according to experts.

 
 
 
Leave your comment on an article

OR QUICK LOGIN