The Area Will Lead the Future Office Supply in HCMC
In 2022, the South of Ho Chi Minh City will dominate in terms of new office supply, but from 2023 onwards, this position will belong to the East and the city center.
3 new office supply buildings in HCMC 2022
In the past 2022, the office market in Ho Chi Minh City recorded three new office buildings entering the market, including CMC Creative Space (first quarter), Pearl 5 (first quarter), and COBI I & II (second quarter). ). These projects have contributed nearly 70,000 m2 of office space for lease, bringing the total office supply in the market to 2.39 million m2 and the net absorption of the whole year to 86,764 m2.
In the fourth quarter of 2022, the occupancy rate of Grade A office space was 96%. The high occupancy rate maintained throughout the year indicates a sustained demand for high-quality office supplies. The average rent in this segment is recorded at 59 USD/m2 per month.
Grade B office market also remained relatively stable with an occupancy rate reaching 91% in the fourth quarter of 2022. This ratio gradually increased throughout the year in part due to new supply hitting the market during the first half of the year.
Rents in this segment were stable at $34/m2 per month – growth of less than 1% QoQ and YoY. The reason is partly due to the increase in the USD/VND exchange rate and the decrease in rental rates in some buildings.
There will be no new supply of Grade A office space in 2022 as all three new buildings are in the Grade B segment. However, many Grade A office projects are expected to be completed and put into operation in the coming years. upcoming year.
New office supply projects for HCMC 2023
If in 2022, the South of Ho Chi Minh City dominates in new supply, from 2023 onwards, this position will belong to the East area with an abundant supply of Grade A. Besides, the central area is also forecasted to be in the leading group in terms of future supply.
Notable projects include The Hallmark (2023) providing 54,500 square meters of office space, The Mett* (2023) providing 30,000 square meters of office space, and The Nexus (2024) providing 34,000 square meters of office space. office space, The Sun Tower (2024) provides 67,573 m2 of office space, E.town 6 (2024) provides 35,000 m2 of office space, and UOA Tower II (2025) provides 45,806 m2 of office space.
Companies with large area expansion needs tend to choose the South area thanks to the new high-quality supply in this area, especially in the E-commerce, insurance, and technology industries.
The future high-quality supply in the Thu Thiem area with good transport connections to the city center will also create favorable conditions for the East of the city to become a magnet to attract reputable companies with great rental demand.
You can read the previous article here: Guide to Accounting for Office Repair Costs