About 85 per cent of the rapidly growing companies in Việt Nam are committed to the environmental, social, and corporate governance (ESG) standard, creating an increase in demand for green-standard office space in the market. Photo baodautu.vn

HÀ NỘI — Experts from top real estate consulting companies in Việt Nam have expressed optimism about development prospects of the real estate market, particularly regarding the office and industrial segments.

According to Savills Vietnam, despite numerous challenges, the interest of foreign investors in the Vietnamese market in general and real estate in particular continues to expand. Fitch Ratings recently upgraded the country’s long-term national credit rating from BB to BB+, with a "stable" outlook. In 2024, Việt Nam's GDP growth rate is expected to reach 6-6.5 per cent, thanks to stable foreign direct investment (FDI) and the Government’s efforts to address real estate challenges, increase public investment, and implement growth stimulation policies in a timely manner.

About 85 per cent of the rapidly growing companies in Việt Nam are committed to the environmental, social, and corporate governance (ESG) standard, creating an increase in demand for green-standard office space in the market.

By 2026, HCM City is expected to provide 300,000 sq.m of new Grade A office space, such as The Nexus project or VP Bank Saigon Tower. Moreover, over 80 per cent of the future Grade A and Grade B office supply in the southern economic hub will meet green standards.

Meanwhile, between now and 2026, Hà Nội will see 15 new projects offering over 389,770sq.m of working space, with Grade A offices expected to account for 86 per cent of the future supply. Green space is projected to constitute 18 per cent of the future office floor area in the capital.

In recent times, many legal regulations have been passed, such as the amended real estate business law, amended housing law, and amended land law.

The head of the Hà Nội and Đà Nẵng offices at Savills Vietnam, Matthew Powell, described the passage of these laws as a positive signal for investment in the real estate market this year, boosting investor confidence.

Việt Nam to welcome large amount of new office supply: Cushman & Wakefield

Việt Nam will welcome a large amount of new office supply in 2024, concentrating on the two main markets of Hà Nội and HCM City, according to analysts from Cushman & Wakefield.

In the Asia Pacific Office Outlook Report 2024 released recently, Cushman & Wakefield said Hà Nội would welcome a total of 80,700 sq.m of new office supply in 2024, mainly in the capital city's central districts.

It noted that another 100,000 sq.m of new Grade A office space was forecast to be put into operation in Hà Nội in the 2024-27 period.

Meanwhile, in HCM City, new Grade A supply is expected in central districts with the launch of three projects in 2024 - 2025, contributing a total of 118,700 sq.m of premium office space to the market, according to the report.

About 81,000 sq.m of additional Grade A supply is also expected in non-central districts during 2024-2026.

Cushman & Wakefield said economic instability had affected general office demand in HCM City as tenants become more and more concerned about costs. The absorption rate was expected to gradually increase from 2024, thanks to new, higher quality supply and improved economic conditions.

Office vacancy rates are predicted to be above 20 per cent throughout 2023–26, driven by continued new supply, according to the report.

In Hà Nội, market demand was strong in the first half of 2023, but slowed down in the second half and is expected to remain low throughout 2024. Vacancy rates are expected at 25-30 per cent in 2023–24 and then gradually decrease to about 20.5 per cent in 2027.

With abundant new supply throughout Hà Nội, the market is hoped to be favourable for tenants in the coming time. Hà Nội's total supply will averagely grow by 3.5 per cent a year from 2023-27.

The Asia Pacific Office Outlook Report is a comprehensive regional report that provides supply, demand, vacancy, and rent data forecasts for cities in Việt Nam and other countries. — VNS