Demand for Office Rent From Information Technology – Communication Increases Strongly
The strong growth rate of the Information Technology – Communication Technology industry has led to an increase in the need for office expansion. This trend is being shown in both major markets, Hanoi and Ho Chi Minh City. As industries with many unique characteristics, office supply will need to meet specific conditions to retain long-term tenants.
Information Technology – communication technology enterprises do well
The field of Information Technology – Communication Technology is developing strongly in Vietnam. In 2021, industry revenue will reach $136 billion, up 9% from 2020. The Ministry of Information Technology – Communications estimates average revenue growth of about 15% in the first quarter of 2022.
Meanwhile, the number of businesses also remained at a good level. According to the Information Technology – Communication Industry Development Chart in the first quarter of 2022, the total number of enterprises operating in Vietnam reached 65,700, an increase of 1,700 enterprises compared to 2021. This index is expected to record growth. 12% annually and reach 100,000 businesses by the end of 2025, nearly double the number of 2020.
Parallel with the industry’s growth is an increase in the recruitment demand of enterprises. Navigos’ report on Vietnam’s labor market in the fourth quarter of 2021 indicated that, because the epidemic did not have a significant impact on that field, businesses were still actively looking for human resources in the market. This research unit said that the efforts of the Government and businesses, especially banks, in “digital transformation” are an important driving force to promote recruitment demand for positions related to this field of future information technology – Communication.
Enterprises in the block have a great need to expand their business activities. This will lead to an increase in office demand, especially in the two major economic centers of Hanoi and Ho Chi Minh City.
You can find other industries here: Industries With High Concentration in District 2
Criteria when searching for an office in the Information Technology – Communication industry
First of all, the industry possesses the characteristics of work related to complex machinery and equipment systems. Therefore, businesses will put forward strict conditions on the specifications of an office building.
Usually, they will look for real estate projects with a large floor load, meeting the necessary standards of a server room. This is the location where large volumes of important business assets are stored. Therefore, companies will make this one of the top evaluation criteria when looking for an office.
Next, the technical electrical cabinets and generators of the building also need to provide a large enough capacity to maintain the stable operation of the business. The industry’s power consumption is very high. For this reason, Information Technology – Communication businesses tend to look for offices in buildings that are developed according to green standards. With a large amount of electricity consumed every working day, green office building projects will help minimize the impact of business operations on the external environment.
With specific criteria in terms of specifications, we find that Information Technology – Communication businesses tend to prioritize office products in the Grade A segment. Because they are built and developed by owners With reputable and experienced investors, these projects will meet the conditions set forth by the business. On the contrary, companies with lower requirements will look to Grade B office buildings with more reasonable rents.
Second, the strong growth momentum of the industry will accelerate the growth rate of enterprises. Therefore, when looking for rental options, IT companies will also consider whether the building has enough empty space to expand their offices in the long term. An IT business can double or even triple its office in a short time. Typical of this trend is Samsung’s research and development center at the PVI building. This unit has expanded the leased area from 8,500 m2 to 22,000 m2 of the floor within 5 years.
Elements of decoration and utilities also contribute to adding value to the business and help create an advantage to attract tenants for investors. For example, a workspace with bright colors will stimulate the creativity of employees. In addition, Information Technology – Communication businesses will look for buildings that provide 24/7 service due to the specifics of their work.
The offices of Facebook and Google are two prominent examples of an ideal environment for this industry. Not only a place to work, but the headquarters of these companies in countries around the world also includes a variety of facilities such as a gym, canteen, rest area, entertainment or security system to meet employee’s individual needs. Line’s office in Hanoi is also a prime example of an office that combines multiple functions. Employees can experience a variety of convenient services such as a game area, a lunch break area, or an area…
It can be seen that the office rental demand of the IT industry is unique but is the most dynamic in both the office market in Hanoi and Ho Chi Minh City. In terms of the southern bridgehead alone, businesses are looking for rental space in all three office grades. However, with the large demand for floor space over 1,000 m2, while the vacant office space in the central area is increasingly limited, drug enterprises in this sector tend to find locations in non-CBD areas, especially in the area, especially in new urban areas such as District 2 and District 7.
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