Vacancy rate of both Grade A and B was lower than 4 percent due to limited supply in the period, said Duong Thuy Dung, Head of the Professional Services of property consultancy CBRE Vietnam.
The vacancy rate of Grade A in Q2 stood at 2.6 percent, falling 2 percentage points from the same period last year. Owners of these segments upgraded material facilities to attract more customers, while adjusting rental prices to make them match the current market.
Ho Chi Minh City’s office market continued to see stable growth in the first half of 2019.
The office market in the southern metropolis has grown stably over the past five years with increasing rental prices and areas, even when supply was expanding, said Deputy General Director of Savills Vietnam Troy Griffiths.
He said the rental price of Grade A offices continued to lead, a rise of 2 percent in the first quarter and 13 percent from the beginning of last year.
As of the end of June this year, total rental area exceeded 1.22 sq.km of 15 Grade A buildings and 63 Grade B buildings.
Due to the limited supply, rental prices of both the two grades declined. The average price of Grade A in the second quarter was $46.7/sqm/month, up 0.9 percent against the previous quarter and 2.9 percent over the same period last year. Rental of Grade B was $23.5/sqm/month, up 0.3 percent quarter-on-quarter and 4.7 percent year-on-year.
The trade war between the US and China prompted foreign firms to move their offices from China to Vietnam, resulting in a 29 percent hike in demand for offices during the second quarter, up 21 percentage point year-on-year, Dung from CBRE noted.
Around 40 percent of demand came from production and logistics firms and half of the companies have offices in mainland China.
Meanwhile, the flexible space market rose sharply in HCM City in the first six months of this year. Between April and June, the market had an additional 4,000 sq.m from Up Deutsches, The Hive-Huynh Khuong Ninh and Leo Palace in District 1, and Compass Office-Landmark 81 and Kafnu-Saigon Pearl in Binh Thanh district.
HCMC property market also had a high absorption rate of 79.9 percent. The market set for a promising July-December as local policies are expected to boost both supply and transactions. Houses will sell well, however, at high prices, said Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokerage Association.
