HCM CITY (VNS)— The office market sector was more competitive in the second quarter, with the entry of new supply in Ha Noi and HCM City, particularly for Grade B office buildings, real estate firm Cushman & Wakefield Viet Nam has reported.
In Ha Noi, the total grade B office space for the second quarter reached 729,000 sq.m, while grade A buildings stayed the same at 330,000 sq.m.
In addition, about16,000 sq.m of grade B office space was added to the HCM City market, pushing the total to 664,000 sq.m. Total grade A stock in the city remained at 157,000 sq.m.
During the same period, total office building space in HCM City reached 820,700 sq.m, a 2 per cent increase quarter-on-quarter and 6 per cent increase year-on-year.
As for average office rental costs, Ha Noi saw a slight drop of 0.7 per cent for grade A buildings, and a drop of 0.12 per cent for grade B space quarter-on-quarter, while HCM City showed improvements after consecutive periods of decline.
Grade A office rent in HCM City increased by 1 per cent quarter-on-quarter, while grade B rent was stable quarter-on-quarter, but increased by 1 per cent year-on-year.
As for occupancy rate, while Ha Noi's grade A saw a climb of 1.33 percentage points quarter-on-quarter to 78.2 per cent, grade B continued its downward trend with a 4.4 percentage point decrease over the quarter to reach roughly 72 per cent.
In HCM City, average occupancy rates of both A and B grades stood at around 91 per cent, similar to the previous quarter.
A significant grade A project in Ha Noi's midtown, called Lotte Center, is expected to enter the market this quarter, adding to the already fierce market competition.
Alex Crane, national head of commercial agents at Cushman & Wakefield in Viet Nam said that rents across all grades in HCM City were expected to remain stable until the year-end when the next wave of projects come online. — VNS