Co-working space is believed to take the reign

Co-working space is believed to take the reign

The three major cities Hanoi, Danang and Ho Chi Minh City are best representative of their regional real estate markets. Overall, flexible and co-working space are forseen to dominate the Northern and Southern markets, while Central Vietnam is a new but promising property scene.
00:00, 24/05/2019
Vietnam co-working startup.

Vietnam co-working startup.


The office market in Ho Chi Minh City continued to be undersupplied. In 1Q2019, no new building came online, thus average occupancy rate and rent both increased. As of the end of March 2019, the average asking rent among grade-A office buildings in HCMC was approximately USD 52.5 per sqm, while the average among grade-B office buildings in the city was around USD 25.6 per sqm.

For Hanoi, average occupancy rate continued to rise in 1Q2019. The grade-A segment increased overall occupancy by approximately 3% over the previous quarter to reach 96%, while the grade-B segment increased only incrementally and was recorded at 85%. Rent is expected to continue to rise, and so is occupancy, thanks to strong demand for office space and Ha Noi’s improving economy.

In terms of rent in Da Nang City, the average asking rent in the grade-A buildings in 1Q2019 was approximately USD 19.5 per sqm; and between these buildings, the occupancy in grade-A office space in Da Nang was around 94%. Grade-B and grade-C achieved around 82% and 99% occupancy, respectively.


With the completion of Saigon Center Phase 2 and Deutsches Haus Ho Chi Minh City at the end of 2017, the supply of grade-A offices in Ho Chi Minh City surpassed 300,000 sqm for the first time. However, despite this influx of new office space, the office market in HCMC is still heavily undersupplied, thus asking rent for both grade-A and grade-B will continue to rise.

In 1Q2019, there was no new office project in Ha Noi. The total grade-A and grade-B office stock in Ha Noi remained at approximately 1.25 million sqm, of which grade-A account for only one third.

Meanwhile, Da Nang’s office market remains small in scale – approximately 88,000 sqm of leasable office space from only 25 buildings – as there were no new office buildings in 1Q2019. Office buildings in or around Hai Chau District account for three fourths of the market, and the remaining quarter are located in or around Thanh Khe District.

In Da Nang, the vast majority of office buildings are grade-B, and only two buildings – Indochina Riverside Tower and Hilton Bach Dang – are grade-A. Combined, these buildings provide around 9,000 sqm of leasable grade-A office space, which is only slightly over 10% of the total office market in Da Nang.


Average occupancy among both grade-A and grade-B offices in HCMC also increased in 1Q2019, with the former at 95%, and the latter at 94.4%. Despite the high asking rent for grade-A offices, they are still preferred by large international companies due to their ease of access, premium image, and advance facilities. Grade-B offices have also seen positive growth in occupancy largely thanks to HCMC’s status as Vietnam’s economic center and startup hub.

Much infrastructure work in the capital city of Hanoi will continue to attract big-name office tenants to the market. Banking, finance and insurance are the most active industries who are expanding their office space in the capital city. With regards to development direction, the west of Ha Noi is the up-and-coming office destination in the city thanks to large supply of land, well-established infrastructure, and plentiful supply of residential projects.

As Da Nang is Vietnam’s third largest economic center, the demand for office space in Da Nang can only increase. Most of demand will come from the software, information technology, and financial service sectors.


Looking at Ho Chi Minh City market, still to come in 2019 are several high-quality offices in both segments; most notably, Alpha City, Friendship Tower, Lim Tower 3 (grade-A), and Crescent Mall phase 2, Etown 5 (grade-B), among others. Altogether, these buildings are expected to bring an additional 150,000 sqm of leasable area to the market. Flexible workspace and co-working space have the potential to significantly alter the office landscape in HCMC. Their rise has helped to partially solve the workspace problem for smaller companies and start-ups. By the end of 1Q2019, the average occupancy among flexible workspace and co-working space was approximately 85%, and this emergent market is promising to expand massively in the following quarters of 2019.

The demand for premium office space in Hanoi is expected to continue to grow in 2019, and by the end of the year, more than 150,000 sqm of leasable office space will have come online, the majority of which will be from grade-A offices. Similar to the situation in HCMC, the constantly evolving technology and business environment, is continuing to drive demand from small to micro tenants. Co-working space and flexible workspace are also on the rise in Hanoi. Their attractiveness comes mainly from their lower rent and higher flexibility to cater to the specific needs of startups and SMEs.

Due to limited demand and supply, the office market in Da Nang is still not as developed as that of Hanoi and HCMC. In terms of future supply, Vien Dong Meridien is slated to come online this year, and will provide approximately 6,000sqm office space to the market.

Ý kiến của bạn

Bạn còn 500/500 ký tự