Office rents rise in downtown Saigon as supply stagnates

Office rentals in downtown Ho Chi Minh City have been rising steadily over the last three months, a new report by CBRE Vietnam says.

Grade A office rent has seen a 7 percent increase in the second quarter over the first quarter and 17 percent increase over the same period last year, the report said.

A similar increase, of 7.3 percent over last year, has also been seen in Grade B office rentals.

The report attributes the rice in prices to high demand and limited supply.

In the last one year, office vacancies in new buildings have been rapidly filled, with vacancy rates for both Grade A and B offices at below 5 percent, the report says.

In the second quarter of 2018, the HCMC market has not received new office space supply. Total Grade A office supply remained unchanged at 382,763 square meters, while Grade B office space rose slightly by 968 square meters to 814,330 square meters.

Dang Phuong Hang, managing director of CBRE Vietnam, predicted that Grade A office rents would continue to increase through 2019 or early 2020, with supply remaining limited. Office vacancies will become increasingly scarce, she said.

Sophie Dao, partner of GBS, a legal and business services firm in Saigon mentioned that, based on her experience with small size and mid-size foreign investors, virtual offices and co-working space still be preferred options in Vietnam.