Market exchange office,
apartments for rent in Ha Noi second quarter / 2014, Ms. Ngo Huong Giang, Senior Manager of Research and consultancy Savills Vietnam said in rental demand metropolitan area increased by 175% qoq surge. This shows that the economy is showing signs of recovery.
Positive changes
At the end of 2012, Savills made the comment, offices for rent in Hanoi will recover in 2014 Specifically, research findings based on the model of Savills forecasts made for Grade A office market and B in the central area of Hanoi showed a slight recovery trend in 2014, with a growth rate of 1% after falling 3% in 2013, Savills forecast, average rents will recover slightly in 2014, with an increase of 1% after falling 3% in 2013 is caused by the supply of future restrictions in the downtown area.
Compare remarks on the market reported second quarter / 2014 and published by the Savills shows, reality took place more actively. For example, the overall market occupancy rate reached 76% (target of 100% is defined as the first quarter / 2011), up 4% qoq and 2% yoy. The occupancy of all 3 classes increased by quarter, in which the class C with 5% increase, followed by about 3% Grade B and Grade A was more than 2%.
However, average office rents continued a downward trend, in which Grade A and Grade C decreased by 3%, but B only reduced by 0.6% on a quarterly basis.
According to Cushman & Wakefield report of Vietnam, office leasing market is more competitive with the new supply completed in Hanoi. Specifically, Hanoi welcomed a class B office projects completed in the downtown area. Total supply of Grade B office in Hanoi raised more than 729,000 m2. Meanwhile, the supply of Grade A office space remain stable at close to 330,000 m2.
In terms of office rents in Hanoi are mitigated. The price of Grade A office rents in Hanoi continued to decline, down 0.7% compared with the previous quarter. Due vacancy increases, the price of Grade B office rents in Hanoi also fell 0.12% from the previous quarter. In particular, rents are likely to continue to decline, particularly with the Lotte Center opened in the next quarter, the supply continues to exceed the demands of the market, increased competition between landlords.
Cushman & Wakefield Vietnam predicted downward trend will persist in the office leasing market in Hanoi. While the occupancy rate of Grade A office 78.2% gain, up 1.33% from the previous quarter, the office occupancy rate fell by 4.4% Grade B from the previous quarter, down 72%.
The degree of recovery is uneven
According to Nguyen Hong Son, Head of Savills feasibility study, supply and demand, the market price of existing office and partly reflects the future economic situation and will take place on actually, because it demonstrated the need to expand part of the business office of domestic enterprises, as well as attract, the attention of foreign investors to Vietnam to open offices.
According to Mr. Son, even in those days the office market is influenced heavily by the economic crisis happening globally, is in fact, all the changes are not too negative perceptions of many people. Perhaps, viewed from a positive perspective, the recent crisis has contributed an important part in changing the behavior of those who participate in this market.
On the other hand, even tenants have become more professional and sophisticated. They are aware that they possess a lot of choices. And moreover, the market competition becomes higher, besides the extensive selection, they also have the opportunity to rent office with a more reasonable price. The professional tenants now consider many factors before deciding on office space. The choice of venue is no longer considered only tasks of reception or administration.
Mr Son said that the office market will be more optimistic in the near future, but the recovery is not uniform in all places, with all the offices. But there is one thing that the market will be adjusted to a more reasonable level.
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