Hanoi short of premium office space

Companies in Hanoi are struggling to find Grade A office space in the downtown area because of limited supply.

Major Grade A office buildings in the downtown district of Hoan Kiem are recording 95-100 percent absorption rates due to high demand in the capital city, according to a recent report by real estate consultancy Savills.

These buildings include the BIDV Tower with an occupancy rate of 100 percent, ConerStone Building, 99 percent, Hanoi Towers, 97 percent and Pacific Place, 96 percent.

The Covid-19 pandemic has not caused major impacts on office demand in the capital city, with the absorption rate in the third quarter falling just 1 percentage point to 90 percent, the report said.

Demand for office from foreign direct investment companies is set to rise in the future, Savills expects. Hanoi posted the highest GDP growth in the country in the first nine months at 3.3 percent, said Le Tuan Binh, head of Hanoi commercial leasing at Savills.

The real estate consultancy said it has received many requests for new office space in the city, especially from foreign companies with deep pockets that are expanding or establishing their factories in the country.

Hanoi’s overall office supply rose 4 percent year-on-year to 1.9 million square meters in the third quarter, and Savills forecasts that addition of over 60,000 square meters will enter the market in the last quarter.