Office-for-lease market welcomes new players

Businesses that previously focused on developing housing projects have begun to lease offices

An Gia, a real estate project developer, plans to join another business field just several months after listing shares on the HCM City bourse.

Office-for-lease market welcomes new players



In its Q4 2019 finance report, the real estate firm mentioned the new type of business – renting B-class offices, affirming that it will accelerate the business in 2020.

The company is managing six office buildings in districts 1, 3, 5, Tan Binh and Phu Nhuan.

In Q4 2019, many housing real estate developers began shifting to leasing offices instead of shopping areas. At least three large real estate developers among top fuve developers in HCM City are shifting to lease offices as the business of leasing retail premises has not gone well.

A series of office leasing companies have opened recently, namely Viet Office, HPP Office and Sabay. The tenants the companies target are small and medium enterprises,l which cannot afford high fees for high-end offices.

Known as a land investor and distributor, Dai Thang, which presents in both HCM City and Da Nang markets, is leasing 3-star office building.

 


A series of office leasing companies have opened recently, namely Viet Office, HPP Office and Sabay. The tenants the companies target are small and medium enterprises,l which cannot afford high fees for high-end offices.

Many co-working areas for startups have been launched, including ones at apartment blocks in district 2 and Dong Sai Gon areas, rather than the older central area of HCM City

Vina Office’s president Nguyen Hong Hai said 2020 is expected to be the ‘golden time’ for the affordable office-for-lease market. He stressed that it is thr time for small-size and basic offices rather than A- or B-class offices as seen in 2015-2019.

Many real estate firms, reacting to the increasingly high demand for affordable offices from small and medium enterprises, have been hurrying to develop C-class or C+ class office buildings.

According to Hai, the office-for-lease market has been growing strongly in the last half decade. Analysts predict that there will be no new supply of A-class offices in the next few years.

The B-class office rent is also on the rise. In general, the demand is high while the supply is short. This explains why the office-for-lease market has attractef many more new players.

There are some reasons that prompt realtors to develop offices for rent.

First, investors don’t need to have huge capital to do business in the market segment. They can lease offices for re-leasing. Many enterprises lease large buildings and lease the unused areas.

Second, this business is safe as there is a high demand in the market.

The offices in the central areas have become expensive, which is paving the way for the development of offices at reasonable costs in the suburbs. 

Le Ha

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