HCM City: Hồ Chí Minh City office rents soar

The office market in HCM City had a strong start to the year, with new records being set. — Photo Hoàng Hải

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HCM CITY — The office market in HCM City had a strong start to the year, setting new records, according to a report by property services provider Savills.

Vacancies had been continuously declining, especially in the central business district, with all recent entries rapidly absorbed, it said.

Rents remained robust with another 2 per cent QoQ gain, continuing its five-year momentum into this year.

Rents for grade A offices continued to top, increasing 2 per cent QoQ, representing accumulative growth of 13 per cent over five quarters.

With good macro fundamentals, the office market was expected to maintain this momentum through 2019.

This year 11 projects with 206,000 square metres would come online, serving the avid demand for high-quality space.

Rents would increase in the prime segment and secondary buildings.

Từ Thị Hồng An, associate director of commercial leasing at Savills Việt Nam, said the city office market has now matured with multiple commercial objectives in play but tenants are scouring the market to balance expansion pressure at reasonable cost.

In the first quarter the apartment market witnessed small new launches, with more than 4,500 units added, down 38 per cent QoQ and 27 per cent YoY.

Grade C dominated new supply with 85 per cent market share, mainly in suburban areas such as districts 8 and 9.

Some 6,400 units were sold, down 42 per cent QoQ and 52 per cent YoY.

In the first quarter, absorption was 53 per cent, increasing 5 percentage points YoY.

New projects accounted for 46 per cent of sales, with suburban districts such as Districts 8, Tân Phú and Bình Tân dominating.

One- to two-bedroom apartments continued to be highly sought-after as they meet both end-user and investment demand.

With limited primary launches, secondary prices are now increasing.

There is increased interest in high-end projects from foreign purchasers, with the 30 per cent foreign quota quickly filling up. This trend is expected to continue, with higher price points expected across all grades.

Grade C will continue to dominate and lead the domestic market. —VNS

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