HCM City (VNS/VNA) - The flexible officemarket in HCM City comprising co-working and serviced offices is among thefastest growing in the Asia Pacific, market researchers said. 

At a meeting with the media to report on the city property market in the firsthalf of the year, CBRE said HCM City was one of the top three flexibleoffice markets in the Asia Pacific.

Of its total office space, flexible office accounted for 2 percent at thebeginning of this year, and would increase to 5 percent by the end of thisyear, it said.

The development of the market is owed to the diverse range of business modelsin Vietnam, according to a CBRE executive.

A representative of batdongsan.com.vn, an online channel providinginformation about the real estate market, told Viet Nam News themarket had grown strongly and would further accelerate in future.

It was no more a preserve of small companies with large foreign players havingmade an entry, he said, citing the example of the multinational Regus, whichhad opened 10 offices in the country.

“The development of co-working space is an unavoidabletrend since office space supply in big cities like Hanoi and HCM Citycannot meet demand.

Besides, co-working is suitable for Vietnamese companies, who are mostly smalland medium-sized enterprises.”

The market would continue to grow in terms of quality as well as size, he said.

Companies would not only offer space in old places but also in grade A andgrade B office buildings, he said.

Speaking to Viet Nam News, a Savills executive said the co-workingsegment in HCM City had grown at 90 percent a year for the last two years andhad around 37,000sq.m to rent, mostly in the central area. 

This growth was impressive compared with other markets in the region likeSingapore and Hong Kong, he said.

The market now has many famous foreign brand names like WeWork, Up, Dreamplex,Regus, Compass and Kloud. 

The market would continue to develop strongly thanks to demand from local andforeign companies who want to cut cost or are in the first stages of studyingthe market, he said.

The status of the market can be clearly seen from the performance of thecompanies in the industry.

A start-up offering co-working space, Toong is now a successful company whichhas been growing and growing.

Duong Do, CEO and founder of Toong, also said: “All offices the companyhas in Vietnam achieved high occupation rates of 85-100 percent six weeks afteropening.”

Duong said his company was planning to offer another 60,00sq.m of space inVietnam, 50,000sq.m in HCM City by 2020.

“Our clients are from 36 sectors. They are individual clients and companieswith up to 200 workers, both newly-established and long-standing.”

The short supply of traditional office space is also cited as a major reasonfor the industry’s growth.

CBRE said the HCM City office market saw no new supply in the second quarter of2019 in either grade.

Due to limited supply in the first half rents for both grades A and B continuedto increase but at a moderate pace, especially grade A.- VNS/VNA