HCM City’s office space market rebounds strongly

In its report on the real estate market in HCM City in the second quarter of 2022, CBRE Vietnam said that the average vacancy rate of Grade A decreased by 1.6% quarter-on-quarter and 2.1% year-on-year to 10.1%, mainly thanks to the strong absorption of office space in District 7.

Meanwhile, the average vacancy rate of Grade B remained at 9.7%, almost equivalent to the figure reported in the same period last year.

The total office space for lease in HCM City in the first six months stood at 1.5 million sq.m.

According to CBRE Vietnam, the information technology and manufacturing industries account for nearly 50% of the total transaction areas.

Along with the recovery of the manufacturing industry after the COVID-19 pandemic, suppliers have also actively searched for office space with a significant increase in successful transaction rates in the new rental category.

Regarding leasing purposes, transactions related to relocation still accounted for the majority with over 50% of total transactions. The rest were transactions of expansion, renewal and new leases (27%, 12% and 10% respectively).

Notably, transactions related to narrowing space dropped off compared to 2020 and 2021.

According to experts from CBRE Vietnam, the first half also marked the return of demand for flexible offices with an occupancy rate of more than 90%.

CBRE Vietnam’s report said that HCM City is expected to welcome about 30,000 sq.m of new office space in the second half of 2022 from three Grade B buildings and two Grade A buildings. Along the banks of the Saigon River, many office buildings where  construction  was suspended due to the pandemic, have now been completed. The total space for lease in this area is 250,000 sq.m.

Rentals of both grades are not expected to see much adjustment until 2024 as most of the new supply in the second half of 2022 will come from non-CBD areas, CBRE Vietnam said.