HCMC – The average office rent in HCMC continued its downtrend as supply increased further in the third quarter of this year, posing more pressure on rent and occupancy benefiting tenants, according to Savills Vietnam.
The market research company released its quarterly report last Thursday, noting that office rent dropped some 3% compared to the previous quarter since property owners were anxious about the risk of oversupply.
The market witnessed asking rents in Grade A office segment dropped 3% to US$57, Grade B was down 2% to US$33 and Grade C also fell 2% to US$22 per square meter per month. However, average occupancy remained stable at 85% thanks to the arrival of new tenants and a shift from private houses to professionally-managed buildings.
Tran Nhu Trung, associate director of research and consulting for Savills Vietnam, said oversupply and competition would continue to drag down rents and occupancy across all the three grades. The competitive rental market, however, will give more chances to tenants in selecting quality serviced buildings.
Savills, however, projected that demand for office space, in the mid and long-term, would continue to increase given the expected high growth of the city’s economy. Grade A office buildings are waiting for a new wave of foreign direct investment inflow, while Grade B and Grade C buildings depend much on the health of domestic investment.
The city’s office market has 154 office buildings at all grades, offering nearly a million square meters of office spaces, with Grade B office more dominant with a 50% market share.
