HCMCGrade A office rents decreased by 5% year-on-year in the third quarter, and may be adjusted by the end of the year by 8-10%.
CBRE has just released the report on the office for lease market in Ho Chi Minh City with the price decline lasting into the third quarter due to the impact of the second Covid-19 and the market has not shown signs of recovery at the end of the year.
In the past 3 months, Grade A office rents have decreased by 5% compared to the same period in 2019. Many building owners continue to offer rental discounts of up to USD 3-4 per m2 per month compared to the whole market price level. . The new office towers also actively adjusted their asking rents by $ 1-3 per square meter a month compared to the same period last year to attract customers. The vacancy rate (without tenants) of Grade A office towers recorded at 11.5%, while in 2019 the vacancy rate was always below 5%.
It is expected that by the end of 2020, office rents in Ho Chi Minh City will be 8-10% lower than in 2019. The rate of vacant offices is likely to continue to increase due to the impact of the epidemic. CBRE forecasts that if the vaccine is produced by the end of 2020, office rental prices in 2021 will be stable. However, if vaccines are not available until June 2021, office rental rates will continue to decrease by another 5% compared to 2020.
Despite the negative impact of the epidemic, the information technology, retail, import-export and e-commerce industries from the UK, Singapore and the US are still expanding the area of over 500 square meters, but this group of businesses is targeting. The office is located outside the central area of Ho Chi Minh City. The centrifugal trend is due to the fact that renting offices on the center of the center has many options at lower prices as well as convenient access to airports, warehouses, and ports. By choosing an office 3-7 km away from the CBD, tenants can save $ 10-20 per square meter per month.
Ms. Pham Ngoc Thien Thanh, Deputy Director of CBRE Vietnam said that the Covid-19 epidemic has reshaped market trends as the negotiating power is shifting from office building owners to tenants. In order to adapt to the new situation, the landlord accepts concessions to tenants such as discounts, flexibly adjusting lease terms, applying technology solutions to optimize the efficiency of the use of the function as well as efforts. embellish, upgrade the quality of the office.
Ms. Thanh said that the office for lease market continues to face difficulties when the business situation of many enterprises is severely affected by Covid-19. During the first 9 months of 2020, the actual office space leased was negative. 31% of transactions coming from CBRE HCMC system come from shrinking tenants’ acreage and this move is expected to continue until year-end.