JLL: HCMC among 20 Asia-Pacific cities with highest office rents

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The office scene in Ho Chi Minh City is heating up with the presence of high-end tenants from outside of the country, according to data from global real estate consultants JLL, and the city is among the top 20 Asia-Pacific cities with the highest premium office rents.

Total office supply in the city stands at 2 million sq m; five-times lower than in Bangkok, with high demand from large corporations leading to a shortage of high-quality office space in the downtown area.

Premium occupancy costs in Ho Chi Minh City average around $59 per square foot, up nearly 7 per cent over the same period last year. Notably, the highest gross rent hit a record in nearly half a decade, of $86 per square foot, in one of the Grade A buildings in the market.

Financial services companies willing to pay for premium office space

The banking and financial services industry are the top occupiers of premium office space globally and the leading sector in more than half of the 72 markets covered.

“High-value, high-margin businesses in financial services such as private, corporate and investment banking firms are renting premium office space in Beijing, Shanghai, Tokyo and Singapore,” said Ms. Jeremy Sheldon, Managing Director, Markets and Integrated Portfolio Services, JLL Asia Pacific. “While cost remains a key factor, these companies prioritize access to talent and the need for amenities when selecting their next office location. They target premium quality buildings to attract and retain top talent, which also helps to enhance their brand image.”

Corporate occupiers across all industries are seeking to consolidate and streamline their portfolios in strategic locations. There is growing recognition of the role that real estate plays in talent attraction and retention. Hong Kong’s Central is a prime example, for its excellent transport connectivity, local amenities, and the quality of digital infrastructure - factors that organizations consider when choosing their next office location.

Hong Kong’s Central has the world’s most expensive rent for premium offices for the fourth year running, according to JLL. The submarket boasts occupancy costs - including rent, taxes and service charges - that are 60 per cent more expensive than New York’s Midtown and nearly 75 per cent more expensive than London’s West End.