Office For Hire Segment Will Be The “Bright Spot” in 2022
Real estate experts believe that office leasing will take place strongly in 2022. Therefore, the office for hire segment will become a bright spot in the real estate market.
Post-covid office for hire segment
After a long time affected by the Covid-19 pandemic, the office for hire market is quickly recovering with high rental demand but limited supply.
The office rental market in Ho Chi Minh City remained stable with an average occupancy rate of 90% and the rental price at VND716,000/m2/month. While Grade A and B offices decreased by 1% in capacity, Grade C offices increased by 1% QoQ, reaching 91%.
Currently, the office for hire segment has a positive growth again with consumption reaching 16,500 m2, higher than the consumption of 1,500 m2 in the fourth quarter of 2021. This positive growth comes from the strong recovery of HCMC’s economy after the pandemic.
In the Hanoi office market, capacity increased by 2% quarter-on-quarter, thanks in part to an improvement from Grade A. By the end of 2022, six projects are expected to enter the market.
Grade A office rents in Hanoi mainly depend on the future supply of the market. In particular, corporate tenants are paying attention to the quality of offices such as green offices, and considering adapting to the transition from the traditional working model to the hybrid working model.
Tenants will have a choice of new high-quality Grade A offices starting later this year, mainly from the Hoan Kiem, Ba Dinh, and Tay Ho areas. New projects will strongly compete with existing buildings in terms of quality, service, and price. Compared to the office market in other countries, the supply of office space in Hanoi is considered to be lower than that of Singapore or Bangkok, Thailand. However, with the advantage of lower rents compared to other countries in the region, while the potential for economic development is very good and there are more and more high-quality buildings, foreign investors are focusing on developing the office market in Hanoi and Ho Chi Minh City.
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Factors that help the office for hire segment become a “bright spot”
Two main factors bring opportunities to the office for hire market and influence business tenants’ decisions to rent space. First, is the green office element. Offices in buildings with green certificates will have more and more competitive advantages, as tenants are gradually looking for quality offices in prime locations, and there are significant changes in space. desk. Replacing traditional workspaces will be new workspaces that contribute to environmental protection as well as increase work productivity, and attract and retain talents.
Second, a remarkable point of the Grade A office market after the Covid-19 pandemic is the emergence of more hybrid working models and agile working models. . It can be seen that the big transactions in the market are in distribution, IT & Communication, manufacturing, finance, real estate, consulting, and healthcare customers. Most of the companies in these groups are tending to adopt a hybrid and flexible working model. These two models are completely different from the co-working model. With co-working, different companies (tenants) share the same premises and use common facilities such as reception, security, and cleaning services. Although the co-working model is mentioned a lot, there are still certain limitations, only suitable for groups of startups, project-based companies, or companies looking for a short-term office.
Experts also forecast that the office market’s activities in 2022 will be extremely prominent, which will become a bright spot in the real estate market. In which, a large number of transactions came from technology, insurance, finance, and real estate businesses.
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