HCMC Thriving Office Market in Global Economic Challenges??

In Ho Chi Minh City, Thu Thiem NUA welcomed two new Grade A office projects in Q3/2023, including The METT and The Hallmark. These projects have been well-received by tenants in the financial and banking sectors. Savills experts evaluate the HCMC office market as an exciting one. Join us as we unpack the latest developments and trends in this exciting sector.?

The Rise of Grade A Offices?

Thu Thiem NUA has recently welcomed two Grade A office projects, The METT and The Hallmark, which have become pivotal players in the HCMC office landscape in Q3/2023. These projects have garnered significant attention, particularly from tenants in the financial and banking sectors.?

According to Savills Viet Nam's Q3/2023 market report, despite the introduction of new supply, office occupancy in Ho Chi Minh City remains high at 90%, which reflects resilience and adaptability.??

A Glimpse into the Future?

The HCMC office market is entering an exciting phase of rejuvenation and holds immense potential in the near future. With a strategic location near the heart of the city and a commitment to green building certifications, Thu Thiem NUA has become a magnet for tenants seeking high-quality offices.?

The METT and The Hallmark have achieved 50% occupancy with rent in the area averaging VND 1.2 million /sqm/month. These prime locations have attracted tenants not only from the financial and banking sectors but also from real estate (FIRE) and information and communications technology (ICT) industries. Notable tenants hail from countries such as Australia, South Korea, Taiwan, Malaysia, and Viet Nam.?

The swift occupancy rates in Thu Thiem NUA's office projects reflect the strong demand from tenants in financial and banking sectors, highlighting the allure of this new urban area.?

Global Economic Shifts and Viet Nam?

According to Troy Griffiths, Deputy Managing Director of Savills Viet Nam, offices in HCMC show great potential. With approximately nine Grade A office developments in the city, there are notable prospects. Commercial development, green building standards, and the growth of the domestic economy contribute.??

Offices are facing challenges on the international front. Even as some tenants gradually return to offices post-pandemic, demand for office spaces has fluctuated with a shift of supply to suburban areas and changing tenant needs.?

However, Viet Nam's office market presents a different story, characterised by diverse structures and strong demand. While not immune to global pressures, cities like HCMC and Ha Noi have shown resilience and consistent growth.?

Looking Ahead?

As we look ahead to 2026, occupancy in Grade A and B projects will likely continue to rise by approximately 6% per year. This growth will be driven by the conversion and quality upgrades of older projects and a robust office leasing market. Ultimately, this is expected to lead to a reduced vacancy rate, potentially reaching 8% by 2025 after peaking at 12% in the short term.?

Contact Giang Huynh to explore office market development prospects