HCMC Office Rental Cost in December Continued Fall
Office rental cost in Ho Chi Minh City in December 2022 continued to fall sharply: With the complicated developments of the Covid-19 pandemic, businesses implemented the work-from-home regime, causing the office rental price to drop seriously in most at this time.
Office rental cost in Ho Chi Minh City in December 2022 continues to decrease sharply
According to statistics from the Vietnam Real Estate Association, the average office rent in the first quarter of 2021 decreased by about 5% compared to the fourth quarter of 2020. In Hanoi, the rent for Grade B office space is about 250,000 – 350,000 VND/m2/month; for Grade A from 350,000 to 750,000/m2/month. Ho Chi Minh City, Grade B office for rent from 350,000 to 550,000 VND/m2/month; Grade A 550,000 – 950,000 VND/m2/month… But from the second quarter of 2021, especially from May until now when the 4th Covid-19 epidemic broke out on a large scale, the office rental market continued to record receive a deeper reduction in rents.
Since the outbreak of the 4th Covid-19 epidemic, businesses have had to apply many methods to support customers such as slow payment, reduced rent, etc. However, the vacant office space still increases because of many businesses. could not continue to hold out, forced to return to the ground. In particular, some customers even decided to cancel the lease.
In this situation, it is impossible to find another tenant but must wait for the epidemic to subside. Implement a reduction of 10-20% of office rent. While the space is because we re-bid from the investor, it is supported to reduce the price, but it is much lower than the level that the company reduces directly to customers.
In order to survive in the context of the largest outbreak of the disease ever, it is easiest to negotiate with tenants, offering a cheaper new rent, but it is also facing difficulties because many tenants to reduce rental costs, want to move to a lower rent building far from the center. Reducing the rental price to the lowest possible level, but some partners still want to cancel the contract even if they have to pay a penalty. The reason they gave was not enough revenue to cover expenses, and financial distress.
Office rental cost recovered strongly at the end of the year
From the beginning of the year until now, the office leasing market has continued to be supplemented with many new projects. In Hanoi, there are: Capital Place project providing up to 93,000m2 of office floor; Thaiholdings Tower added 23,000 square meters of floor space; Leadvisors Tower with 18,000 m2 of floor space. In Ho Chi Minh City, the new supply of more than 42,300m2 is located outside the center, of which 55% is in suburban districts, Go Vap and Thu Duc. It is expected that by the end of 2022, these two markets will receive more than 540,000 square meters of office space for lease into the market.
Notably, offices with a large area (from 1,000m2 or more – PV) are difficult to find tenants. Therefore, many investors have sub-lease units to operate according to the model of Coworking Space (shared office – coworking space), dividing the leased area into separate spaces, serving the needs of customers. rent offices of many different objects.
What is the current trend of office leasing?
To meet the needs of businesses, currently, investors tend to rent offices with an integrated design between the workplace and open space and a place to provide common services such as supermarkets, coffee shops, etc. coffee, children’s playroom…
In which area is the current office rental cost building for lease in Ho Chi Minh City?
Office buildings for lease in Ho Chi Minh City are currently mostly concentrated in District 1, located on the following roads: Nguyen Hue, Dong Khoi, Le Loi, Le Duan, Dien Bien Phu, Le Thanh Ton, Ton Duc Thang,… These are all “golden” roads, prime with the most expensive prices in Saigon.
Offices for lease in District 1 have but what advantages?
Most of the offices for rent in District 1 are expensive, but convenient for businesses when working with frontline agencies, easily traveling between districts to promote and improve the company’s image. In addition, the prestige and value of the business will increase, and at the same time attract more customers.
You can read the previous article here: Offices for Rent Building Costs