Vietnam - Office for rent market to remain dismal: Experts

Many experts said that 2012 will be a really difficult year for real estate market in general and office for lease segment in particular.

2011 witnessed the most unmarketable situation in the history of office for rent segment in Hanoi when the vacancy ratio as of the end of 2011 was 28%. Of which, office Grade A and B saw the vacancy ratio of 34% and 24% respectively.

In HCM City, the office rental charge in 2011 declined, especially for office Grade A at two buildings of Bitexco Tower and Vincom Center, leading to the year on year decline of 2.3% in the vacancy ratio of office for lease. In particular, office Grade A has rental cost of about $32.16 per square meter per month, down 8.3% from the previous year, Grade B at about $18.09/m2/month, down 7.5% on year and Grade C at $14.87/m2/month, down 8.5%.

CBRE said that to attract tenants, the investors should promote various forms such as free of charge for hanging hoarding and increasing the rent-free duration. At center areas, for minimum contract for 3-5 years, the tenants have a rent-free for three months. The rental prices have dropped quite a lot but office rents in Hanoi and HCM City are still among top 50 cities with the most expensive rents worldwide.

According to the assessment of the real estate consultancy firm, Knight Frank, HCM City is ranked at the 27th position with approximately $50 per m2 per month and Hanoi is also ranked the 32nd place with nearly $40 per m2 per month. Office rents in Hanoi and HCMC are expensive, surpassing many other major cities such as Birmingham (UK), Munich (Germany), Helsinki (Finland), Boston (the US) and Warsaw (Poland).

Here are reference prices of some office for rent projects in Hanoi and HCM City (excluding VAT and service charges).

In HCM City

In Hanoi

VietBiz24

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