HCMC office rents soar to five-year high

A report on the Ho Chi Minh City office market in the third quarter of 2018 said the main reason for rising prices is that office supply is not able to meet current demand.

The report, prepared by real estate service firm Jones Lang LaSalle (JLL) Vietnam, noted that in the past three months, the average gross rent of Grade A office towers rose to about $50/sq.m per month, up by nearly 7 percent over the same period last year.

However, the highest gross rents of towers in prime locations in HCMC soared even higher to $70/sq.m per month. This marks a record high for nearly half a decade.

Similarly, rents for Grade B rental properties located in Districts 1 and 3 of the city have surged over the $30/sq.m per month threshold.

Rental office space occupancy rates for Grade A properties are now over 95 percent while Grade B offices have been filled up 96.5 percent.

Office occupancy has accelerated as a result of the boom in information technology, e-commerce and co-working space industries. The demand for HCMC office space could increase by 10 percent every year for the next 10 years, according to JLL Vietnam.

As of the third quarter of 2018, the total office space for lease in HCMC was approximately two million square meters: Grade A buildings totaled 250,000 square meters; Grade B, 900,000 square meters; and Grade C, about 810,000 square meters.

The JLL report also forecasts that in the next three months, office rents in HCMC will continue to rise quickly due to the lack of new premises to meet the huge demand.

Grade A and B office space will continue to be in short supply in the fourth quarter of 2018, as the next 11 buildings planned are only to be completed by 2019-2020 at the earliest, it said.